Despite the summer’s debate in Congress, area human resources consultants say employers must hold the course on the Affordable Care Act.
At the same time, they said employers can’t stand still in the face of rising costs.
The Senate failed to pass legislation to repeal or reform the act, known as “Obamacare,” earlier this year.
That means the act and its provisions still stand.
Congress is scheduled to come back into session in early this month, but HR consultants say employers must proceed with the law as it is while looking to contain costs and help their employees.
Walter Lachenmayr of HR Deptartment LLC has decades of HR experience working for companies like Staples, Honeywell and Mack Trucks. The Hagerstown, Md.-area resident has been a consultant for about seven years.
“My advice is to stay the course. Nothing has changed. … I also would advise them to get a consultant,” he said. “There’s a lot of options out there that a good broker will not only be able to provide, but will be able to negotiate with a carrier.”
‘It can’t be intrusive’
Lachenmayr said employers might need help finding insurance plans and provisions that work best for the company and its workers.
Health care costs rose 7.5 percent last year, he said. For next year, he’s seen projected increases ranging from 9 to 50 percent.
“It’s anyone’s guess what it will be,” he said. “The uncertainty about the ACA is driving up insurance costs. … It could be a phenomenal increase.”
Some familiar cost-savings ideas range from using generic medication to encouraging spouses of employees to obtain coverage through their own employers.
Options like Health Savings Accounts can help some people, Lachenmayr said, and employees need to understand the benefits and procedures associated with such measures.
“Regardless, employers need to look at options they have,” he said. “They need to create a culture that prioritizes wellness. … There are terrific resources within Hagerstown for creating a culture that promotes wellness.”
Employers should proceed with some prudence. He counseled firms to find coverage that offers both high-deductible plans as well as more robust options to cover the range of their employees’ needs.
“It can’t be intrusive,” Lachenmayr added. “People are so sensitive.”
For larger employers, “there are still really competitive, creative options you can do to help with costs,” said another veteran employee benefit consultant Jeff Mussolino of Hagerstown. “It’s definitely tough on businesses because they don’t have the flexibility.”
He said people have to know the market and the various insurance carriers’ plans.
“This is not a market right now for someone who is new to the business or a novice,” he said.
He predicts more use of Health Savings Accounts.
“I think everyone across the board is going to end up in Health Savings Accounts before it’s over,” he said.
‘A Rubik’s Cube’
Henry Smith, a Maryland attorney with decades of experience in employee benefit issues, said the ACA runs to some 2,400 pages.
“I read them all,” he said.
The ACA requires employers with 50 or more full-time equivalent employees to provide health coverage to full-time employees or pay a tax penalty. This is known as the “employer mandate.”
The Associated Press, citing the Kaiser Family Foundation, reported that nearly 96 percent of companies of that size already were offering coverage before the law took effect. Nearly 35 percent of companies with fewer than 50 workers also were offering insurance.
Former President Barack Obama signed the ACA into law in 2010, and many of its provisions have been phased in since then.
“The only piece that’s left to be rolled out is the so-called Cadillac tax,” Smith said, noting that provision “has been controversial since it was enacted.”
In essence, it’s a tax on the most generous insurance plans. Fewer than 1 percent of employers have plans what would be subject to the Cadillac tax. But revenue from that tax is one of the ways the ACA is to be funded.
The Cadillac tax goes into effect in 2020, which “may as well be another geological epoch from now,” Smith said.
The provisions of the act are interrelated, he said, so pulling at one piece of it affects the others.
“It’s quite a Rubik’s Cube,” he said.
‘There are answers’
Smith said policymakers should step back and make basic decisions before they repeal, replace, revamp or continue the ACA.
“Most of the discussion about the ACA has been in the nature of putting the cart before the horse,” he said. “… The body politic has not said, ‘What are we trying to accomplish here?’ … I don’t hear what the objective is.”
If the objective is universal coverage and cost control, he said, the federal government could enact Medicare for everyone. But that decision is bound to impact important parts of the system and leave many unhappy.
If the objective is establishing a total free market system, the government could loosen requirements and regulations established. But that could mean more people without insurance coverage.
“There are answers, and I think they could be ferreted out. … The fix is to call a time out and have a discussion,” Smith said.
Mussolino agreed, saying physicians, pharmaceutical companies and insurance companies must be part of talks to understand and control costs.
“Until they get those costs under control, there’s no way you’re going to fix health care,” he said.