By: Matt Troutman
reprinted with permission from the Sunday, August 12 edition of the Marion Chronicle-Tribune
If
Papa John’s CEO John Schnatter is to be believed, the effects of the
Obama administration’s health care reform law will ultimately raise the
price of the pizzas by 15 to 20 cents.
The pizza maker is not
alone with the cost of implementing provisions of the Patient Protection
and Affordable Care Act. There are plenty of business people in Grant
County considering how they can make the program work and still stay in
business.
Earlier this month representatives and owners from
local companies attended a luncheon seminar hosted by the Marion-Grant
County Chamber of Commerce titled “Employer Strategies for the
Affordable Care Act.”
Hosted by Chris Schrader, Schrader and
Associates, Bloomington and Ryan Robinson, JA Benefits, Bedford, the
talk covered a wide-range of potential effects of the law on business.
Robinson said there were some changes affecting businesses that already took effect or will do so later this year.
For
example, rebates for fully insured Anthem plans were mailed to
employers on August 1. These were required under the law’s requirement
that health insurance companies spend a certain percentage of their
revenue on premiums of health care. Schrader said he anticipated the
full effect of the law won’t be felt by businesses until 2014 or 2015.
He said the law’s “pay or play” mandate could make businesses rethink
the size of their organization.
Size matters under the health
care law. Employers with more than 50 full-time employees are required
to provide health insurance coverage, under the law, employees who work
30 hours a week or more are considered “full-time equivalents.”
Employers are subject to a $2,000 penalty if full-time employees change
their coverage and enter into new insurance exchanges.
These
measures were enacted to ensure that Americans have more access to
health care coverage and ultimately reduce prices by putting more
individuals into the insurance market.
However, some of the provisions have potential unintended consequences.
Mark
Draves, president and CEO of Carey Services, said he was concerned that
employers of large numbers of people at modest wages may not be able to
sustain their businesses under the law, especially if they face
penalties.
Carey Services is the 12th largest employers in Grant County.
“Trying
to quantify those costs for an employer that has a signficant portion
of its workforce under the threshold is a bit unnerving,” he said.
Draves
said another “unnerving”prospect was that Carey Services receives a
large part of its funding from government sources, which have been cut
in recent years. He said as Carey Services’ insurance coverage is
expanded to comply with the law the cost of insurance may increase and
put his organization in a financial squeeze.
As of Friday, representatives for the Obama campaign could not be reached for comment.
Schrader
told the luncheon that this “pay or play” provisision could make
American companies face decisions they never had to before. He said
companies in France and Italy face regulations after they reach certain
employee numbers, so many cap their employment.
“I think for the first time in the country we have to confront the costs of being a larger size company,” he said.
Robinson
said among the “looming issues” companies must consider or do is to
provide summary of benefits to employees starting September 23 and
provide the value of group health plan coverage of W-2 tax forms.
He
said after going through upcoming requirements for small and large
employers that many effects of the law won’t be known until new
components like the insurance exchanges are up and running.
“One thing that’s for certain is nothing is certain,” he said.