Commentary: Agents Act Now on Healthcare Reform

By Steve Purkapile | March 5, 2013

For agents and brokers, 2013 is a relatively quiet period related to Affordable Care Act requirements. However it should be a busy time for agents and brokers to begin preparing their clients for what is coming in 2014.

Helping human resources departments who have variable hour employees decide how they are going to measure their hours of work in order to determine who is eligible for coverage under ACA rules need to start that measurement process in 2013.

It would be a major mistake to assume that if you have a plan year effective other than Jan. 1, 2014, that you can wait until the beginning of the plan year to implement ACA requirements.

With so much of the 2014 requirements are related to revenue, the final regulations are going to require implementation by every employer on Jan. 1, 2014. The federal government will want to begin receiving penalty revenue immediately since the exchanges have to start accepting participants and will need that revenue to offset the subsidies.

In addition, there are reporting issues, changes to eligibility definitions, changes to waiting periods, and on and on it goes.

In short, 2013 should be the busiest year yet for educating and preparing your client for what they need to be doing beginning Jan. 1, 2014. The earlier you prepare them, the less frustrated they will be. If agents and brokers wait until fourth quarter to start this process, it will be almost too late to provide adequate counsel.

During the debates it was mentioned that healthcare reform has brought about positive changes. What wasn’t talked about is who is paying for all these added benefits. Unfortunately, it’s the low middle class who can’t afford to pay for it.

“What we’re seeing is that this healthcare law puts unique challenges on chain restaurants,” said Rob Green, executive director of the National Council of Chain Restaurants. “The law will have cost implications on a lot of different business sectors, but restaurants and retail are in the bull’s eye.”

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 the traditional 37-40 hours per week, and the fact that the law applies to any business with more than 50 employees — a number some say will discourage franchise growth.

While 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, it could also mean less work hours.

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 and more popular as employers try to cut costs and pass the cost on to employees. And as new law takes full effect in 2014, employers are looking at potentially significant cost increases to their bottom line.

Agents and brokers should be providing their clients with various financial models to help them see how increased participation, improperly structured plans, or improperly structured contributions can impact their overall financial picture. Employers not only need to know if their current program is in compliance with the financial requirements of ACA, but also what the impact of adding new participants to the plan might be.

Here’s some advice agents and brokers can offer their clients:

  • 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 account, 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 utilizing cost-savings 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. Bringing long-term solutions like comprehensive wellness programs to the table will help control future costs. Plus, the ACA legislation provides significant incentives to drive healthier behavior.

Now is the time to address benefit programs.

Purkapile is vice president of employee benefits at Van Gilder Insurance Corp. in Denver, Colo., a privately held insurance brokerage firm serving the Rocky Mountain region. Phone: 800-873-8500. Email:

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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