Employers

Understanding health care reform's impact on large employers

The Patient Protection and Affordable Care Act (PPACA or health care reform) has far-reaching implications for employers. The bill has been called the most significant social legislation since the Social Security Act. And its impact on employers and their employees will be just as far reaching. As a senior manager, you are facing some tough decisions — the most pressing among them is understanding the cost to both your company and your employees. Arkansas Blue Cross and Blue Shield can help.

Will Your Costs Increase?

Penalties (such as "pay or play" or "unaffordable coverage"), new taxes, enhanced benefit requirements and broader eligibility rules add up to big dollars for large employers.

Enhanced benefit
requirements include:
  • Auto enrollment of new employees
  • Limited waiting periods
  • No annual limits on "essential benefits"
  • Maximum deductibles and out-of-pocket limits
New taxes include:
  • "Cadillac" tax
  • Comparative effectiveness research tax
  • Health insurance and other health industry taxes
  • Exchange reinsurance program tax

PPACA's impact on your company is only the beginning... you may also consider:

  • PPACA provisions that impact your employees and how your decisions for the company affect them.
  • The impact of the decisions you make around PPACA on your company and your employees from a tax perspective.
  • Individual mandate.
  • Insurance exchanges.

Will you pay or play?

Faced with the new employer mandate and penalties for not providing coverage, employers must choose a course of action. Will your company:

"Pay"
  • Pay the penalties and get out of the health insurance game?
  • Implement a solution customized to your company?
"Play"
  • Stay the course and make no changes to your health plan, even if it means you must pay new taxes or penalties?
  • Make only those changes necessary to comply with the new provisions of the law, and make no changes to your current contribution strategy?
Understanding the law’s impact is complex. There are many financial considerations to include:
  • Employee tax liability with/without group coverage.
  • Employer payroll tax liability with/without plan sponsorship.
  • Penalties incurred for various strategies.
  • Tax impact of any penalties.
  • Employer contribution strategy.

Making an informed decision requires complicated modeling that considers a number of variables, including the impact of the tax code, PPACA taxes and penalties, employee household income and any subsidies available to employees. Subsidies to individuals are based on household income.

Health care reform impact analysis and strategic planning services

To provide employers with the expertise they need to make these complex decisions, Arkansas Blue Cross offers impact analysis modeling to help employers understand how each option impacts their employees and the company’s bottom line. Every company is different. And each will be faced with a unique set of challenges around implementing health care reform. Our custom actuarial services will help you make the right choices for your company.

Our Services Include

  • Analysis of the cost impact to your company if you choose to "pay" (cancel insurance program and pay penalties) or "play" (keep insurance program in place).
  • Estimated penalties your group may be liable for with current program.
  • Guidance on contribution strategies and plan changes resulting in reduced penalties and costs.
  • Analysis of the impact on employees of maintaining the current plan or implementing any proposed changes.

Please contact the local sales office nearest you for a proposal, including an estimated fee.

Employers have big decisions to make around health care reform. We can help.