Friday, November 15, 2013
The Affordable Care Act has been one of the most talked about laws of our time.
Critics have called the law a catastrophe; its defenders say it is simply misunderstood, and that it is a vast improvement over the healthcare system it is replacing.
Marshall Beckham, an insurance consultant with Maybank & Beckham, was in Berkeley County discussing the law last week.
On Nov. 5, Beckham gave a presentation at the Hampton Inn on University Boulevard to a small group of Berkeley Chamber of Commerce members who are business executives.
“Roads and healthcare are the issues you hear about over and over again,” Berkeley Chamber CEO Elaine Morgan said, adding that healthcare is like riding a merry-go-round and a Ferris wheel simultaneously.
“It’s made for a lot of conversation,” Beckham said. “There’s a lot of things being said that are not true. It comes down to where you live and your employer.
“There’s good and bad. I’m not biased or politically charged. I’m just telling you what I know.”
Beckham offered a business perspective for what the Affordable Care Act means for companies and how leaders should prepare.
“Insurance is still insurance,” he said.
Large group insurance is considered 50 or more full time employees (FTE), which means anyone who works more than 30 hours per week for 48 weeks.
“This effects seasonal workers and food and beverage companies,” Beckham said.
Seasonal and 1099 workers are not included. Penalties take effect Jan. 1, 2015.
A seasonal business would be one that hires more employees for November, December and January, according to Beckham.
“There’s some strategy here,” he said. “The government will let you pick any consecutive six-month period.”
Seasonal companies can sample their employees when they have the least workers.
Companies must offer qualified insurance coverage and must pay 60 cents on the dollar for medical claims.
Under the Affordable Care Act, starting in 2014, an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements, according to Healthcare.gov.
A qualified health plan will have a certification by each marketplace in which it is sold.
The coverage offered must be affordable for employees, who cannot pay more than 9.5 percent of their annual earnings or else employees can ask for a government subsidy.
There is a $3,000 penalty per employee if a company does not offer qualified or affordable insurance, Beckham said.
“If you don’t offer coverage at all it’s a $2,000 blanket penalty,” he said.
There is no penalty for being without insurance for religious groups, undocumented immigrants, those who are incarcerated, members of Indian tribes or if family income is below the threshold for filing a tax return -- $10,000 for an individual, $20,000 for a family.
If a company’s plan hasn’t changed since March 2010, then their plan is grandfathered in.
“The problem is so many people have had to make plan changes because of the cost. Not many are grandfathered in.
“From what I’ve seen, you’re better being a large group than a small group right now,” he said.
A company with less than 50 FTE is not required to offer group health insurance coverage.
The new law also requires rates to be based on age from now on.
“The rate is the same whether somebody is healthy or sick as long as they are the same age . . . It’s the same rate for a 37-year-old marathon runner as a person who has sat on a couch 37 years.
“Insurance is not only not free, but if you don’t buy it you get penalized. This was communicated poorly. It’s human nature to not pay attention until it affects the wallet.”