by Rich Rovito, WMEP Industry Reporter
The Patient Protection and Affordable Care Act, known as the ACA, has been law for more than three years now, but significant questions remain for manufacturers of all sizes as provisions of the act continue to be rolled out.
“The ACA is so broad it effects everyone,” said Michael Gotzler, general counsel of the QTI Group, a Madison-based, privately owned human resources organization that provides staffing services, professional and executive recruiting, human resources consulting and partnership services to businesses and organizations.
Gotzler and Jane Clark, chief operating officer of QTI Human Resources, were featured speakers at recent Lunch & Learn sessions presented by the Wisconsin Manufacturing Extension Partnership.
Since the passage of the ACA, federal agencies have continued to issue regulation and guidance in an effort to clarify various provisions in the act. Myriad changes have occurred since September 2012, when the WMEP hosted initial ACA update sessions. Gotzler and Clark outlined situations facing manufacturers as they prepare for the point when most major ACA provisions finally take effect in January 2014.
“By the manner in which the act was passed, there a lot of the details were left to be determined at a later date in time,” Gotzler said. “Congress didn’t get specific on a lot of key provisions within the act. What that means for manufacturers is that we have to pay attention, for better or for worse, to when these different federal agencies implement rules and guidelines.”
The issues can be complicated, Gotzler admitted.
“But ignorance isn’t a defense for non-compliance,” he said.
Under the act, no one can be denied coverage but everyone must either purchase their own insurance or receive it through their employer or a subsidized government program. Insurance exchanges are being established to give residents a spot to compare and shop for plans. States had the option of setting up their own exchange, partnering with the federal government or letting the federal government run the exchange.
Wisconsin has opted to let the federal government handle its exchange.
Making the act “more real” for employers regardless of their size is that exchange notices must be provided by all employers to all current staff by October of this year, even if an employee currently isn’t on a given company’s insurance. All employees hired after Oct. 1 also have to receive exchange notices.
“The theory of these notices is that the federal government needs the help of employers to educate employees about health insurance options,” Gotzler said.
Through the insurance exchanges, individuals and small employers will be able to compare the insurance and the cost of the premiums, Clark said.
“We don’t know yet in the state of Wisconsin which insurance companies will be participating,” Clark said.
Individuals applying for insurance through the exchange must have a household income that is less than 400 percent of the federal poverty line.
Tax penalties for failing to obtain health insurance coverage are modest in the first year, Gotzler said.
“There is some thought that some folks won’t get coverage and just pay the penalities,” he said.
Expanding health care coverage is perhaps the top priority of the act, Gotzler added.
“It really seems to be focused more on coverage and getting more Americans health insurance through some means,” he said. “It’s hard to tell how successful it will be.”
The act is being implemented over an eight year period.
Key provisions already in effect have included expanding access, removing pre-existing condition exclusions and allowing dependents through age 26 to stay on their parents’ plan.
One of the most important provisions, which has gotten little coverage, pertains to non-discrimination, Clark said.
A lot of employers offer either different plans or have different eligibility dates or offer varying amounts of coverage for high-level executives, she said.
“Under the ACA, that is prohibited,” Clark said, adding that the penalty is $100 per employee, per day for violating the provision. “The penalty is quite steep.”
Certain plans are exempt are for those companies that maintained the current status of their plans.
Among the regulations being implemented is the new “pay or play” rules under which companies must either offer certain health insurance benefits to their full-time employees or face significant penalties. An important threshold question is whether a company is deemed a small or larger employer. Under the ACA’s rules, there are two very distinct considerations for small and large businesses.
Clark described the large employer “pay or play” rules as the “scariest component” of the act for businesses with 50 or more employees, Clark said. Those employers are subject to penalties for not offering any health insurance coverage at all or not offering plans to provide minimum essential coverage, such as preventative care, in-patient and out-patient services, and hospitalization.