Houston Chronicle L.M. Sixel column

Source: Houston ChronicleSept.自存倉 28--Providing health insurance is an expensive benefit for companies to offer to their employees. So it's probably not a surprise that businesses are looking to the new Affordable Care Act to save some money.Over the past few months, companies have been weighing whether to drop their own health care coverage and refer their employees to the new health care marketplace for their care.The new health care exchanges -- which have since been rechristened by the federal government as the "marketplace" -- will open on Tuesday for participants to compare their choices. The new insurance plans will go into effect on Jan. 1.The rules are complex -- companies with 50 or more employees will be required to provide health care for 95 percent of their full-time employees. And the cost of care can't be excessive, which the government defines as 9.5 percent of wages.Businesses covered under the law will be assessed penalties of $2,000 per employee per year beginning in 2015 if they don't provide health care coverage to 95 percent of their full-time employees.While legislators never intended for the marketplace to replace traditional employer-provided health insurance, many companies are weighing the costs and benefits of dropping their coverage and paying the penalties.While some smaller companies will probably opt to shift their employees to the exchanges and pay the penalties, many larger ones have decided that while that might be a good decision financially, doing so likely would make it harder to attract and retain workers.With the plans so new and complex, we asked a few employment experts for their advice for both employers and employees. Here is what they said:Q: Are companies considering whether to shift their employees to the marketplace?A: It's very alluring to employers to get rid of health care altogether, said John Hennessy, national practice leader for health and welfare at the Hay Group in Dallas. Instead of spending $6,000 or $7,000 a year, they figure they can pay the $2,000 penalty and be done with it.But most employers are not pursuing that option, Hennessy said. They may in the future, but they're not going that route now.Companies offer benefits to attract and retain talent, he said. But if they remove one of the key benefits -- health care -- it will likely drive the talent away. They'll go to work for the competition instead."You don't want to be the only one doing it," he said. And the idea of the social contract -- the unwritten pact between employee and employer -- hasn't completely disappeared.The thinking still goes: "With a good job, you get good insurance."Q: Health insurance is expensive. Is it a good idea for employers to shift their employees to the exchanges?A: "Essentially you're giving employees a pay cut," said Jesse Gelsomini, a lawyer who specializes in employee benefits at Haynes and Boone in Houston. Most employers subsidize the cost of employee mini storagensurance, he said.By saying, "You're on your own," the employee would lose that subsidy as well as taking on a sizable tax burden, he said. "It could be a significant hit to the employees' wages."Q: What are the taxing implications?A: Currently, very few employee benefits get the "amazing tax treatment" that health plans enjoy, Gelsomini said. Neither companies or employees pay taxes on the cost or benefits of health plans.The employer portion is also fully deductible as a business expense, he added.However, under the new Affordable Care Act, an employee who doesn't qualify for a government tax subsidy will have to pay for the coverage on an after-tax basis.Q: Are there other reasons employers might be reluctant to move their employees to the exchanges?A: Imagine you're an employer with at least 50 employees and you have a skilled workforce, Gelsomini said. Even if you figure you'll save a few bucks, do you want to run the risk of losing good employees?Q: Do you see signs of companies dropping their coverage and moving employees to the marketplace?A: It will be more common among smaller employers, especially those with contingent workforces, said Michael Barbour, the partner who leads the health care practice in Houston for Mercer, a benefits consulting firm. It will be more of a cost-driven issue."It's not a major wave," he said, "but a dewdrop."Barbour predicts that because the penalties against employers are delayed until 2015, that there won't be significant shift until then.Q: Are all employees below a certain income level eligible for government subsidies?A: No. If your company offers health care coverage and you reject that coverage that meets the qualifications under the Affordable Care Act and use the "marketplace" instead, you're not eligible for the government tax subsidy, Gelsomini said.Q: What are the big hurdles employers face?A: One of the most complicated questions is determining who is a full-time employee. It covers those who work at least 30 hours a week, but it also involves a "look back period" and a "stability period," among other factors.Another key concern is whether companies have properly classified their independent contractors. If it turns out that they're really employees, a company faces a $2,000 per person penalty, including on those employees that it properly classified in the first place."Companies are making sure they're getting that right," said Michael Abbott, an employee benefits lawyer with Gardere in Houston.Companies also face a communications hurdle, Hennessy said. The new law is complicated, and companies are facing a difficult burden administratively.They'll have to staff up in human resources to handle all the questions, he said. And it won't just be the employees and their spouses."Their mother is going to call," he said.Copyright: ___ (c)2013 the Houston Chronicle Visit the Houston Chronicle at .chron.com Distributed by MCT Information Services儲存