California Finalizes Exchange Blueprint. The AP    (11/15) reports, "The board overseeing California's efforts to establish an insurance marketplace for providing affordable health care approved its operational blueprint Wednesday, an essential step toward meeting a key deadline under the federal health care reform law." Governor Jerry Brown "is expected to forward the plan to the Obama administration on Friday, the deadline for states to notify the federal government about whether they plan to establish health care exchanges."

Your Business Can Turn Red Into Black Before 2014

From:  Real Health Care Reform

With years of double-digit rate hikes pumping up the cost of providing employees with group health insurance coverage, a solution is long overdue. More and more small businesses are struggling to move employee health benefits out of the red. The other side of the equation is how to attract the talent needed to make your business out-perform competition, so dropping benefits completely also comes with long-term consequences.

One solution that I’ve seen small business owners use successfully again and again is to move out of the group plan market. Instead of group health insurance, your business can help employees obtain coverage through the individual health insurance market at a much lower cost. There is one caveat: pre-existing health conditions are not guaranteed to be covered in the individual market until 2014.

An HRA is a means to reimburse whatever employee medical expenses you choose to cover, including the cost for their individual health insurance. The flexibility of HRAs makes them suitable for various types of businesses. Flexibility is also advantageous for employees with divergent health care wants and needs. We’re seeing a great interest in alternative therapies as appreciation grows for the positive patient outcomes produced.

And, since employees are reimbursed, there’s little upfront funding required with an HRA. Of course, you can combine an HRA with Health Savings Accounts. These offer employees more incentive to save for retirement costs, while keeping funds available to cover routine out-of-pocket health care costs. You can find the details of how both options work here on our website.

The simplicity of an HRA keeps administrative costs down, too. A third party will review and approve employee requests for reimbursement to maintain impartiality, and tax-free reimbursements can go paperless with direct deposit or go through another payroll system. Overall, the HRA and the HSA are helping small businesses remain competitive. They incorporate tax advantages and flexibility that make both the employer and the employee happy.

If your business requires more than 50 workers, you have a decision to make about the approaching health care reform changes.  The Affordable Care Act is on track to enforce a penalty for failing to provide minimal health insurance coverage.  The first step is to see whether your company fits the definition of what firms can be penalized.

The actual language of the act is not that clear in a couple of ways.  It refers to employers with at least 50 full-time “equivalent” employees, and indicates there’s a penalty if the employer does not offer “qualified” and “affordable” health insurance to employees.  Here’s the translation.

It’s simple if you only employ staff on a full-time basis.  Otherwise, the “full-time equivalent” can refer to the full-time equivalent of your company’s part-time employees.  This is used to calculate the size of a business based on the number of hours worked by all W-2 employees. That makes the number of full-time equivalent employees roughly equal to the full-time employees plus full-time equivalent part-time employees.  The result is rounded to the lowest whole number, and here’s an example to make that more clear.

Start with the actual number of employees who work 40 or more hours a week. Then, determine how many employees work less than 40 hours a week. You can do that by summing the hours for which wages were paid to part-time employees, and dividing the total by 2,080.

If your company faces a penalty, the next hurdle is to deal with which health insurance plans are “qualified.”  One way to look at that is to consider the set of health care services that are designated as minimum essential health benefits (EHB). Although these must be covered by certain plans in 2014, state insurance departments will have some discretionary power to modify the EHBs.  So, I’m afraid we’ll have to wait for that, and for the affordable definition to be ironed out before 2014.

Once the actual coverage and cost is definite, it’s just a matter of figuring whether the cost or the penalty is higher, right?  Like most important decisions, this is more of an “if, and, or but” analysis than it is an “either/or” choice. Your business may depend on attracting and keeping innovative and responsible staff.  A competitive health benefits program certainly helps, but the cost of employer-sponsored health insurance is a major drain on the company. There are options, and one that’s becoming increasingly popular is health care reimbursement.

You could provide employees with tax-free contributions to use for an individual health insurance plan.  These are available at a much lower cost than group plans.  And, Health Reimbursement Arrangements allow for tremendous flexibility, which can benefit both the company and the employees

Employer Penalties Starting in 2014 Under Obamacare
From: Real Health Care Reform

The 2010 health care reform law does not mandate employers to provide health care coverage to their employees.  However, starting January 2014, large employers will have to face penalties if they do not offer affordable health insurance coverage to their employees.

Small business owners with less than 50 employees are exempted from penalties. They can even get tax credits toward their health insurance costs.  Tax credits are only available to small businesses with 25 or less workers with an average wage of $50,000 or less.   For employers having full-time workers not exceeding ten with an average wage of $25,000 can get full tax credits. Non-profit employers can get a maximum tax credit of 35 percent of the employer’s premium contributions while for-profit employers can receive at most 50 percent.

You might be wondering why only small employers will be given tax credits.  Based on a survey conducted by the Kaiser Family Foundation, only 49 percent of employers with three to nine employees offer employer-sponsored health care coverage compared to the 95 percent of large employers with more than 50 employees.  If tax credits are provided, small employers will be motivated to provide health insurance policies to their employees.

There are two different scenarios for large employers who do not provide affordable health insurance to their employees:

• Large employers that do not provide health care coverage and have at least one full-time worker getting health insurance via the exchange.  For this scenario, the employer will be fined an annual fee of $2,000 for every full-time worker but the first 30 employees will be excluded.

• Large employers who do not offer adequate or affordable coverage with at least one full-time worker getting health insurance via the exchange.  Employers in this situation will have to pay an annual fine of $3,000 for each full-time worker getting a premium credit, with a maximum penalty equal to $2,000 for each full-time employee, but the first 30 employees will be excluded.

What do you mean by unaffordable and inadequate coverage?

Coverage is considered unaffordable if the employee needs to contribute more than 9.5 percent of their family income to employer coverage.   Coverage is inadequate if the insurance does not pay for at least 60 percent of health care costs.

Obama's Reelection Ensures Affordable Care Act Will Remain.

Amid the Presidential election coverage, many front-page stories made mention of President Obama's healthcare policies, namely the Affordable Care Act, concluding that his reelection means the reform law is here to stay. Several outlets also devoted articles exclusively to examining how the ACA will be implemented now that the President has won a second term. All acknowledged that though the law is almost certain to remain in place

Bloomberg.com - About 1.6 million Americans will travel overseas this year for medical procedures ranging from facelifts to heart bypass surgeries, according to the Medical Tourism Association -- a number that is expected to rise 35 percent next year. Some go because they don't have coverage in the US, or their plans don't cover certain procedures.