Agents Act Now on Healthcare Reform

By Steve Purkapile | February 11, 2013

The year is a prime time for agents and brokers to begin preparing their clients for Affordable Care Act (ACA) requirements coming in 2014.

Don’t assume that you can wait until the beginning of the plan year to implement ACA requirements. Human resources departments that have variable-hour employees, for instance, need to decide in 2013 how to measure hours of work to determine who is eligible for coverage under ACA rules.

Plus, expect the federal government to want to begin receiving penalty revenue immediately after the regulations take effect because the exchanges have to start accepting participants and will need that revenue to offset the subsidies. There also will be reporting issues, changes to eligibility definitions and changes to waiting periods, among other changes.

In short, 2013 should be the year to educate and prepare clients for 2014. The earlier you prepare them, the less frustrated they will be.

Healthcare reform provides a great opportunity to provide wise counsel for building a reasonable benefits program.

Healthcare reform has brought about positive changes. Unfortunately, the low-middle class is paying for these benefits but can’t afford to pay for it.

“The law will have cost implications on a lot of different business sectors, but restaurants and retail are in the bull’s eye,” adds Rob Green, executive director of the National Council of Chain Restaurants.

Two parts of the legislation may raise costs for restaurant chains and other industries: The definition of full-time employees as those who work 30 or more hours per week, rather than 37-40 hours per week, and the law applies to any business with more than 50 employees – a number some say will discourage franchise growth.

Human resources staff will have more piled on their plate trying to track variable hour employees to determine who is now eligible for benefits from one month to the next.

Higher Premiums

Employers are spending 36 percent more on healthcare cost than they did five years ago, according to national trend watchers. High deductible plans are becoming more popular as employers try to cut costs and pass costs onto employees. As the new law takes full effect in 2014, employers are looking at potentially significant cost increases to their bottom line.

Agents and brokers should provide their clients with various financial models to show how increased participation, improperly structured plans or improperly structured contributions, can impact their overall financial picture. Employers need to know if their current program is in compliance with the ACA requirements, but also what the impact is of adding new participants to the plan.

Here’s some advice for agents and brokers:

  • Introduce high-deductible health plans with a health savings account.
  • Link biometric screenings and health risk assessments to lower employee contributions.
  • Link employer contributions to health savings accounts, flexible spending accounts or health reimbursement accounts.
  • Implement a tobacco-free workplace.
  • Reward employees who meet corporate wellness goals.

Difficult Decisions

Most employers are taking a cautious look at rising costs and will begin using cost-saving measures like employee wellness programs. If agents and brokers provide sound counsel as to all the options available, it is more likely they will “play” versus dropping their benefits program altogether.

This is a great opportunity to provide wise counsel and see the positive side of building a reasonable benefits program that complies with ACA, while making modifications so that it does not become a financial burden to the company. The ACA legislation provides significant incentives to drive healthier behavior.

About Steve Purkapile

Purkapile is vice president of employee benefits at Denver-based Van Gilder Insurance Corp. Phone: 800-873-8500. Email:

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Insurance Journal West February 11, 2013
February 11, 2013
Insurance Journal West Magazine

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