As the Affordable Care Act marches from court-challenged to court-upheld and onto the bottom line, businesses continue to face challenges if they intend to comply.
The Hudson Valley Gateway Chamber of Commerce recently hosted a panel discussion titled “Surviving Health Care: What Businesses Need to Know” at Cortlandt Town Hall.
The panel discussion, moderated by Bruce Apar of Yorktown Pennysaver Corp., featured accountants, health insurers and executives at Hudson Valley Hospital Center in Cortlandt discussing the ins and outs of the game-changing legislation.
The ACA applies to employers with more than 50 full-time employees that work more than 30 hours a week, requiring businesses to provide health insurance or face penalties. The health care industry is often touted as Westchester”™s largest economic engine, generating $10 billion and 30,000 jobs.
Businesses with fewer than 50 full-time employees are not required to offer health insurance.
Dr. William Higgins, president of the medical staff at Hudson Valley Hospital Center, said that the hospital had been prepping for health care reforms for years.
“It”™s business as usual here,” Higgins said. “It really hasn”™t been that bad.”
Higgins said before the ACA was implemented, the hospital had begun changes. Effective 2015, physicians will be reimbursed based on the better care they offer patients rather than being reimbursed by having more patients. Fees will be paid based on patient outcome rather than services rendered.
“Health care is being driven toward the health of the patient,” said Mark Webster, CFO at Hudson Valley Hospital Center. “Doctors will try to force healthy behaviors. They are trying to drive healthier options.” He expects an ACA-related spike in insurance rates.
Hospitals will be penalized if they excessively re-admit patients.
“Providers will have to pay lots of money to help implement this and I don”™t see a lot of money coming back to them,” Webster said. “I expect to see larger deductibles and co-pays”.
Under the ACA, states are required to set up their own health care exchanges by October or have the federal government do so for them.
New York became one of the first states to comply with the order to create an exchange per an executive order from Gov. Andrew Cuomo. The exchange opens Oct. 1 and will begin selling insurance coverage on Jan. 1.
Last October, New York formally selected Oxford EPO as its essential health benefits benchmark plan and has received more than $300 million in federal grants to set up the exchange. The state expects to select its insurers by July 15.
Businesses have to decide whether to offer insurance or have their employees get insurance through the exchange and incur a penalty. The penalty is a complicated formula involving the number of full-time employees multiplied by $2,000.
Even offering employees coverage does not leave businesses immune to penalties. Employees can receive tax credits for less than satisfactory insurance plans. And the employer may be subject to a penalty.
To get around the ACA, some employers have been cutting hours or laying off employees to get their number of full-time employees below 50.
“The people who need health care the most will be hurt the most,” said Kenneth McGevna, an accountant with McGevna and Associates CPAs in Yorktown. He called the ACA “an atrocity.”
Mark Kessler, director of strategic initiatives for HealthPass, a nonprofit commercial health exchange, said that small businesses with one to two employees should team up and buy insurance together to keep costs down.
Small businesses are eligible for a tax credit if they have fewer than 25 full-time employees and their salaries average less than $50,000.
The ACA, warts and all, is not the biggest problem for our healthcare. The ACA has other significant concerns and effects, but I would argue it’s a distraction for the bigger issue. That issue is Medicare.