06 Apr Healthcare – It is What It Is … The Law!

It is worth noting two factors that may alter this Act:

Without changing or negating the entire Act, The US Supreme Court will probably rule on four issues found within the Act:

  • Whether Congress can compel individuals to buy health insurance on the theory that the decision to buy or not to buy insurance affects interstate commerce.
  • Whether the penalty for not buying insurance is a tax that the federal Anti-Injunction bars courts from enjoining before the tax has been assessed or collected.
  • Whether the mandate of individuals to buy health insurance is “severable” from the rest of the law or whether overturning the mandate means the entire law must be stricken down.
  • Whether the expansion of eligibility for health coverage’s under State Medicaid programs improperly coerces states to spend more money.

The outcome of the US Supreme Court decision may further erode public support in advance of the 2012 elections, causing legislators to substantially modify or repeal the Act all together.

But, for now, it is incumbent upon us to move forward with the health care law’s implementation, and, yes, also to deal with its ramifications.

Although health insurance can take a huge chunk out of company revenues, it has been found that offering top notch benefits packages can attract and retain exceptional employees; contentment in the workplace is a key ingredient to help your business flourish. If properly managed, businesses can control and, possibly, lower their healthcare costs. Following, are some tips that may be worth your consideration:

  1. Most Employee Wellness Programs offer help in some of the following areas:
    • Nutrition: Nutritional programs educate employees about food options and equip them to make healthy dietary choices.
    • Physical Fitness. Wellness programs frequently provide employees with opportunities to incorporate exercise into their daily lives.
    • Smoking Cessation. Smoking cessation programs are a no-brainer for both employers and employees.
    • Physiological Testing. Many employers offer physiological as a regular part of their wellness programs. Cholesterol tests, blood pressure screenings, and other simple exams can provide early warning signs for more serious problems.
    • Stress Management. Wellness programs that help employees deal with stress improve not only the psychological health of your employees, but their physical health as well because stress is linked to other health problems such as depression, cardiovascular disease, diabetes, and obesity.

2.  Cost sharing with employees. Making employees aware of the high cost of health insurance by sharing costs gives them incentive to follow preventive measures. Following, are four ways to place some of the burden of the healthcare costs on your employee’s shoulders.

a)    High deductible plans – A typical healthy family will only visit the doctor once or twice a year. The premiums for a low deductible won’t be recouped. Opt for a higher deductible to obtain lower monthly premium. Cover the catastrophic.

b)    Lower co-payments – Studies have shown that lowering co-payments actually entices employees to keep up with their healthcare and prescription drugs. They aren’t as likely to skip treatments. By doing so, the employee stays more in the preventative mode rather than treating a growing problem.

c)    Co-insuranceCoinsurance refers to money that an individual is required to pay for services, after a deductible has been paid. Coinsurance is often specified by a percentage. For example, the employee pays 20 percent toward the charges for a service and the employer or insurance company pays 80 percent.

d)    Fixed premium contribution – Many employers provide a fixed contribution amount to each employee. This prevents discrimination.

3.  Set up a Doctor or Nurse hotline through the insurance carrier. This popular technique has reduced the number of trips to the emergency room or doctor’s office as well as cutting down on absenteeism.

4.   Audit your premiums. This is a hot topic lately! Verify that you are paying only for your employees and their legitimate dependants, not for their extended family, neighbors or friends.

5. Provide coverage only for generic drugs. The savings will be reflected in your premium cost when your employees request the generic brand, instead of the name brand, from the physician. Savings can amount to 80% on the costs of prescriptions.

6. Provide information to the employees about first aid skills. A handy laminated card or paycheck stuffer with first aid tips may reduce the number of visits to the doctor and can even save lives. Talk to the employees about keeping an updated medical kit at home. Perhaps a discounted medical kit provider can be located in your area to provide a kit to the employees.

7. Is there a Free Clinic in the area? Hundreds of dollars may be saved by taking advantage of clinic preventative procedures that are offered at little or no cost by local towns and communities. In addition to various free screenings, they may also offer immunizations and blood pressure checks.

8. Negotiate the cost of medical services. On the front end of seeking care, most medical providers will negotiate their fees and the savings can be quite significant. If, after the fact, a medical bill auditor can negotiate with the provider to “re-price” the services, it is possible to receive quite a significant reduction.

9. Learn the In’s and the Out’s of the Protection and Affordable Care Act and, in particular, the Tax Penalties for Employers. To receive the information you need to follow fast-breaking policy developments, you can go to:

The Heritage Foundation’s Web Memo 

Summary of the New Health Reform Law Publication #8061 by Kaiser Family Foundation

Areas to understand which have a direct impact of your costs:

  • Employers that offer minimum essential coverage to all full time employees and dependents.
  • Employers that do not offer minimum essential coverage to all full time employees.
  • Understand the meaning of “Full Time” employee: An employee working an average of at least 30 hours or more per week and at least 130 hours in a calendar month.
  • Understand the definition of “minimum essential coverage. This area is still being defined. What is known is that if a plan offers low benefits, it will likely increase the number of employees who will be eligible for tax credits which in turn will affect the employers excise tax liability.

10.  Employers may find it prudent to band together with other “like” companies to form an association for healthcare.  If structured properly, a healthcare program may be formed using the law of large numbers, which generally works as long as there is little or no adverse selection. The group may come up with a handful of various plans to offer the employees some diversity. Web based delivery now makes this option very viable.  An association is able to provide an endorsed plan that has been negotiated with one or two carriers. This approach can yield a 5% to 20% savings in premiums.

11. Still yet to be determined: The various health exchanges, which are in the midst of being formed.

TOP TIP: It is advisable to proactively manage these changes and mandates because the next level of reforms is being implemented over the next 30 months.  In the meantime, make your company an attractive group to underwrite!

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