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3 Employer Health Trends to Watch in 2018

Businesses that want to boost their bottom line in 2018 need look no further than their employee health and benefits Strategy. More than 50 scientific, peer-reviewed studies underscore the correlation between investing in employer health and improved financial performance. Most recently, researchers found that companies with award-winning wellness programs also have award-winning stock prices, outperforming the Standard and Poors (S&P) Index by 7-16% annually. Even if employee health initiatives did not directly cause a company’s stock to rise, emphasizing these initiatives is associated with high-performing companies.

Just because your company offers comprehensive health initiatives, however, does not mean employees will immediately take advantage of these offerings. Many employees have been conditioned to only use health insurance when they need it, waiting until they are showing symptoms of sickness before seeking care. Moving to a preventative care model requires a change in behavior and thinking. Employers must think strategically about their offerings and consider the most effective ways to encourage participation in evidence-based, preventive care programs.

Despite uncertainty over Congressional healthcare reform, trends like high-value care, direct payment primary care and value-based insurance design could help businesses hold the line on health care costs or even lower the long-term cost of care while also empowering their employees to proactively take control of their health.

These are three employer health trends to watch in 2018:

1. High-value care.

What it is:
High Value Care (HVC) is an approach designed to improve health outcomes by educating patients about the importance of proactively seeking appropriate care and making this care more affordable and accessible. A 2016 study published in JAMA found that simply reducing spending on low-value medical services and unnecessary medical procedures could save employers millions. Low-value medical services are those that offer limited benefit to the patient but come at great expense to insurance companies and employers. In contrast, high-value care services often cost far less than some low value care services, but offer significant long-term health benefits.

High value care aims to reduce emergency department overuse, antibiotic overuse, vaccine under-use and unnecessary hospital re-admission. The result: an estimated $500 billion in savings, according to the Network for Excellence in Health Innovation (NEHI).

What employers can do:

Employers have an opportunity to customize their benefit design to encourage benefits proven to make a difference and to discourage the opposite. Examples of high-value care include preventive screenings, vaccinations, education about medication adherence and proper use, and chronic disease treatment. High value care initiatives can be rolled out in conjunction with workplace wellness programs that offer free or reduce care for HVC preventive services.

2. Direct payment primary care

What it is:
Direct primary care (DPC) is an emerging model of primary care in which medical practices offer primary care services for a flat, recurring fee that is billed monthly, quarterly or annually. Patients can visit their primary care provider as many times as necessary for care and receive vaccinations and other preventive services for free or at a reduced cost. Most individuals with DPC opt for a low-cost, high-deductible insurance policy that would cover any emergency or specialist care not provided through their primary care provider. Patients benefit by being able to see their doctor at any time. Doctors are able to rapidly address evolving health concerns, reducing the number of sick days an employee might have to take and increasing on-the-job productivity. Many DPC practices offer direct phone or email access so patients can get immediate medical advice while avoiding unnecessary appointments.

What employers can do:

While DPC is still an emerging model, both physicians and patients who have opted for this care model report higher rates of satisfaction and better outcomes for chronic disease prevention and management. Employer who wish to promote direct primary care could offer their employees a low-cost, high-deductible health insurance policy in addition to contributing to an HSA (healthcare savings account) to offset the recurring DPC fee. This model may help reduce long-term health care costs while improving care outcomes for employees. DPC is still in the early stages of development, so this is one trend employers should watch closely in 2018.

3. Value-based insurance design

What it is:

Value-based insurance design (VBID) is a new approach to structuring health care policies that incentivizes employees to utilize high-value services with the greatest potential to positively impact their health. Currently, employees pay the same for all medical services under a given health insurance plan, whether or not these services are high-value or low-value. As out-of-pocket costs continue to rise, employees are then less likely to utilize high-value services that are essential to improving health outcomes. The result: employers end up shouldering the cost of higher insurance premiums since care is sought after the fact (an employee is already sick or a chronic condition is not managed) rather than before the problem exists.

VBID aims to change this by aligning out-of-pocket costs, like co-payments, with the value of services. In essence, this means that high-value services with the greatest potential to impact a patient’s health become more affordable while low-value services become more expensive. This principle can also be applied to prescription drugs. Under the VBID model, the level of employee cost-sharing for higher-priced medications would be aligned with the clinical value. This approach is especially beneficial for employees who are struggling to control a chronic condition like diabetes or heart disease and find that lower-cost alternative medications are unable to adequately control their health condition. VBID recognizes that the same prescription drug could be of high value to one patient and a lower value to another and aligns costs accordingly to these clinical nuances.

What employers can do:

Like direct payment primary care, value-based insurance design is still in its nascent stages. However, employers should consider ways to integrate VBID into their approach to health care. VBID reduces cost sharing and encourage adherence to high-value services and providers. Employees benefit with better access to higher quality, affordable care and employers benefit with reduced wasteful spending, more efficient expenditures and a healthier workforce.

Next Steps for 2018

High value care, direct patient primary care, and value-based insurance design are three innovative approaches to the decades-old problem: how can we control rising health care costs and improve patient-care outcomes? Watch this space in 2018 for more in-depth discuss of these employer health trends.

About
Scott Foster is President of Wellco.  Scott and Wellco have provided award-winning systems to measurably improve health conditions and costs.  Wellco specializes in engagement, analytics, integration and high-value care.  For more information visit, www.Wellcocorp.com

Permission to Reprint
You may reprint any items from Health Trends Blog in your own print or electronic newsletter. When you do, please include the following paragraph: Reprinted from “HealthTrendsBlog.com,” free, proven emplooyer health strategies and market intelligence from Wellco.  Learn more at www.wellcocorp.com. Copyright (c) by Wellco.

4 Health Insurance Changes Coming in 2017

2018 is right around the corner and with it are major changes to employer health care laws. President-elect Donald Trump, who campaigned on a commitment to repeal the Affordable Care Act (ACA), is continuing to make the end of Obamacare a centerpiece of his transition team. Trump has still not released a detailed proposal for an Obamacare replacement, but his nominee for secretary of health and human services offers clues for what may be in store.

Representative Tom Price is a six-term Republican congressman and former orthopedic surgeon. Price has been introducing bills offering a detailed, comprehensive replacement plan in every Congress since 2009, when Democrats first started to work on the legislation. Both Price and Trump have advocated for free market solutions, the end of different penalties for non-compliance and fees, and changes to FSA and HRA regulations.

Eliminating the Individual and Employer Mandate: What Does This Mean for Businesses?

Before we dive too deeply into potential changes, it’s important to understand that whether you love or hate Obamacare, it won’t simply “go away” as soon as Trump takes the oath of office. For starters, both Trump and Republicans have signaled that certain ACA provisions like eliminating pre-existing condition exclusions or allowing extended coverage of adult children up to age 26 will continue.

Additionally, keep in mind that Republicans lack the supermajority necessary to repeal the law outright. Should Republicans try to repeal it, Democrats would likely filibuster against a repeal. Only a Republican-led supermajority would be able to stop the filibuster. Since Republicans don’t have this supermajority, they’ll need to find other avenues to dismantle Obamacare provisions like the mandate to buy or provide health insurance or face financial penalties. The most likely approach is the budget reconciliation process. This process would allow Republicans to eliminate the individual and employer mandates to buy health insurance as well as eliminating the so-called “Cadillac Tax” on certain plans.

Eliminating the individual and employer mandate to buy health insurance would effectively kill state exchanges– assuming Congress hasn’t already dismantled them altogether. Last month I wrote about the challenges posed by the so-called “death spiral”, which occurs when there are not enough young, healthy adults to offset the higher costs associated with care for older, sicker Americans. The result is a steady uptick in premiums, further driving young, healthy adults away from the exchanges, which in turn drives up premium costs for everyone. The Affordable Care Act tried to prevent this death spiral from occurring by mandating everyone have health insurance or face penalties come tax time. But even this mandate doesn’t seem to have been enough to keep premiums steady for both individual state exchanges and small business exchanges. It’s unclear how Trump and Price plan to address this problem.

What Happens if Businesses Are No Longer Required to Provide Health Insurance?

Currently under the Affordable Care Act, businesses with 50 or more full-time employees are required to provide health insurance coverage. Unfortunately, as many small business owners know, determining the number of full-time employees on staff is not always easy. For example, many retailers hire additional employees in advance of the holiday shopping period. The same holds true for service-based catering or event companies where employment can swell during peak summer months. Staffing companies also faced a challenge. Employment can increase or shrink overnight based on client needs. Staffing companies struggled to not only determine full-time employment counts, but also whether they should pass “pay-or-play” costs on to the companies that contract with them.

The IRS issued guidelines to determine the FTE (full-time employee count) using the look-back period rules, but some companies have complained that the rules are burdensome and confusing. Companies that were required to offer health care but opted not to do so faced a $2,000 penalty per employee. Despite early complaints about

Eliminating employer-mandated health care may alleviate some administrative and accounting burdens. However, for small business owners who do want to provide employees with health insurance, eliminating exchanges like the SHOP Marketplace may make it more difficult for smaller businesses to afford flexible, quality coverage options. This is one development I’ll be watching closely in the coming months.

New FSA and HRA Rules: What Business Should Expect

Throughout his campaign, Trump reiterated his commitment to allow insurance to be sold across state lines and changes to HRA and FSA rules. Here’s a brief of overview of the changes we can expect once Trump is inaugurated:

  1. End the prohibition on employer HRAs
    Prior to ACA, many employers funded HRAs (“health reimbursement arrangements”) that employees could use as reimbursement for qualifying health care expenses on a tax-free basis. Employers could also reimburse employees who chose to purchase individual insurance policies as long as employees provided proof of payment. ACA effectively killed this reimbursement option with an excise tax of $100 per day per affected individual until corrected. Expect changes to this rule in 2017.
  2. Remove the cap on FSAs.
    In 2017, the cap for FSAs (“flexible spending accounts”) is set at $2600. Expect changes to this cap – or an outright removal– this year. An FSA allows employees to put away pre-tax money to use for certain out-of-pocket medical expenses. With out-of-pocket expenses growing, FSAs offer a considerable tax advantage.However, as of 2011 when FSA caps were first introduced, the average FSA participant was only contributing $1400 per year– well under the original $2500 federal FSA cap that went into effect with ACA. (The cap has since risen.) Furthermore, only one in five Americans who were eligible for an FSA even contributed to one. It remains to be seen what impact eliminating the FSA cap will have on an individual’s health care cost burden.
  3. Eliminate fees.
    Trump and Republicans are poised to eliminate a host of fees, including the fee on health insurance issuers and the medical device tax and the Patient-Centered Outcomes Research Trust Fund.
  4. Allow minimum premium plan.
    ACA mandated all health insurance meet essential health benefits. Assuming Trump and Republicans choose to do away with this requirement, this would open the way for a return of minimum premium plans “mini med plans” that offer low caps for benefits coverage in exchange for low premiums.For example, prior to ACA McDonald’s required employees to pay $56 per month for a plan that offered $2,000 in annual benefits. In 2010, Denny’s offered its hourly employees a mini med plan that capped doctor’s benefits at $300 per year and offered no inpatient coverage. Under ACA, these plans failed to meet essential health benefits and were phased out. While it’s unclear whether McDonald’s, Denny’s or other companies will re-introduce these plans for low-wage workers, the option might be back on the table.

For now, uncertainty is the only thing that’s certain. Business owners will need to wait and see which fees and rules are eliminated or restructured in the coming months.

About
Scott Foster is President of Wellco.  Scott and Wellco have provided award-winning systems to measurably improve health conditions and costs.  Wellco specializes in engagement, metrics, integration and high-value care.  For more information visit, www.Wellcocorp.com

Permission to Reprint
You may reprint any items from Health Trends Blog in your own print or electronic newsletter. When you do, please include the following paragraph: Reprinted from “HealthTrendsBlog.com,” free, proven corporate health strategies and market intelligence from Wellco.  Learn more at www.wellcocorp.com. Copyright (c) by Wellco.

What the End of Obamacare Means for Business Leaders

White HouseAfter a turbulent election season, all eyes on are now on the President-Elect Donald Trump and Speaker of the House Paul Ryan for health care reform. Trump and Republicans in Congress made repealing and replacing the Affordable Care Act (“Obamacare”) a signature campaign issue. While Trump avoided offering specifics during the campaign, he did stress the importance of health savings accounts and opening markets across state lines to empower “maximum choice and freedom for the consumer.”

In late November, Trump’s transition team announced that Representative Tom Price, a six-term Republican congressman and former orthopedic surgeon, would be Trump’s nominee for secretary of health and human services. Price is a strong pick for supporting Trump’s goal to end Obamacare. The Congressman has been introducing bills offering a detailed, comprehensive replacement plan in every Congress since 2009, when Democrats first started to work on the legislation.Health Care Management

What Will Replace the Affordable Care Act?

Since President-Elect Trump has yet to release any specifics on health care reform, health policy analysts are now focusing on plans proposed by Price and Ryan.

Earlier this summer, Ryan unveiled his proposed replacement plan for the Affordable Care Act. While the plan will keep many of the same provisions offered by Obamacare – protecting people with pre-existing conditions, offering tax credits to help make insurance more affordable – Ryan would eliminate the individual and employer mandate to buy insurance. Ryan’s plan reflects the conservative view that creating a competitive market place will ultimately lead to better quality and more affordable insurance.

“Don’t force people to buy insurance,” Ryan told the crowd at AEI when he announced his plan in June. “Make insurance companies compete for our business.”

Many of Ryan’s proposed changes come from Price’s proposed “Empowering Patients First Act”. In addition to repealing ACA, key provisions of this act include:

–Offering age-adjusted tax credits for the purchase of individual and family health insurance policies

–Create incentives for people to contribute to health savings accounts

–Offer grants to states to subsidize insurance for “high-risk populations”

–Allow the sale of insurance across state lines (insurers licensed in one state could now sell policies to residents of other states)

–Authorize business and professional groups to provide coverage to members through “association health plans”

At this time, neither Ryan nor Price’s plan include detailed specifics on the amount of tax credits available to subsidize premium costs or the level of insurance that would be tied to these credits. Instead, both have focused on lowering costs through tax-free health savings accounts. Individuals, the government or employers would be able contribute to these accounts, which are designed to keep costs lower for young, healthy adults.

Can Anything Be Done About the “Death Spiral”?

One criticism of the current health exchanges is that there are not enough incentives for young, healthy adults to stay in the insurance marketplace. However, if there’s no mandate to buy health insurance, it’s unclear why younger adults would choose to stay in the insurance marketplace. Including young health people (so-called “young invincible”) in the insurance marketplace is essential to balancing the higher costs associated with care for older, sicker Americans. When there aren’t enough healthy members of the marketplace, premiums rise and scare even more healthy people away, further exacerbating the problem. This is known as the “death spiral”.

UnitedHealth announced earlier in 2016 that the insurance giant had lost close to $1 billion on its ACA plans and would be pulling out of many marketplaces in the coming year. Insurers across the board have struggled with marketplace plan pricing, with many initially underpricing to gain a larger portion of market share. A lack of young, healthy plan participants compounded this problem. In 2014, only 28% of exchange members were in the “young invincible” range of 18-34 years– and that percentage remained steady into 2016. Actuaries say the market place needs at least to boost that membership to at least 40% in order for rates to remain stable.

Even with the individual mandate to buy insurance, the current exchanges struggle with this problem. It remains to be seen if health insurance savings accounts will be enough to incentivize healthy adults to continue purchasing insurance once the mandate is eliminated.

State Innovation Waivers and Single-Payer Health Care: Dead on Arrival?

Starting in 2017, states will be able to purchase “Innovation Waivers” (also known as 1332 waivers) that allow them to modify parts of ACA. But as I discussed back in October, most states have found the Innovation Waiver program confusing. Only a fraction of states including Hawaii, Massachusetts and Vermont have publicly released waiver applications. With the future of the Affordable Care Act up in the air, so too is the willingness of states to pursue “Innovation Waivers.” For now, states are following a “wait and see” approach in response to the Republican’s pledge to end Obamacare.

The Future of state-based single payer health care also remains uncertain. The proposed “ColoradoCare” ballot initiative would have created a resident-owned, non-governmental health care financing system. Currently, only about half of Coloradans receive health insurance from their employers. Those who don’t must purchase it from the state exchange or face a penalty. In the volatile state marketplaces, ballot initiatives like ColoradoCare could demonstrate a new way forward for states. But Coloradoans soundly voted down the ballot initiative on Election Day.

While the program promised to provide health care to all state residents regardless of their ability to pay, concerns remained over the program’s management structure and a proposed increased tax burden on employers. Ultimately, a bipartisan effort defeated the initiative. Single-payer health care is dead for now in Colorado and with Republicans in charge of the White House and Congress, the focus is now on individual payments.

What’s Next for Health Care Reform?

While Republicans maintained control of both the House and Senate, a diversity of views within the party may continue to pose challenges to the leadership. Furthermore, Republicans lack the supermajority necessary to defeat a Democratic-led filibuster against an outright repeal. Instead, Republicans may seek other avenues through the budget reconciliation process. This allows Congress to reconcile a previously adopted budget resolution without the supermajority needed to pass new legislation. This would allow Republicans to eliminate the individual and employer mandates to buy health insurance. Republicans could also use the budget process to eliminate the so-called “Cadillac Tax” on certain coverage plans (although this tax has already be delayed until at least 2020).

In my next article, I’ll look at which changes business owners should anticipate, including the end of the employer and individual mandate as well as removing the prohibition on employer stand-alone health reimbursement arrangements (HRAs) and eliminating fees like the Patient Centered Outcomes Research Institute Fee.

About
Scott Foster is President of Wellco.  Scott and Wellco have provided award-winning systems to measurably improve health conditions and costs.  Wellco specializes in engagement, metrics, integration and high-value care.  For more information visit, www.Wellcocorp.com

Permission to Reprint
You may reprint any items from Health Trends Blog in your own print or electronic newsletter. When you do, please include the following paragraph: Reprinted from “HealthTrendsBlog.com,” free, proven corporate health strategies and market intelligence from Wellco.  Learn more at www.wellcocorp.com. Copyright (c) by Wellco.

What Employers Need to Know About State-Level Healthcare Reform

Health StrategyAs Election Day gets closer, health care reform continues to make headlines. Recently, Democratic candidate Hillary Clinton outlined her plan for health care reform in the New England Journal of Medicine (NEJM). Clinton’s plan would modify the Affordable Care Act (ACA) with a series of tweaks to reduce out-of-pocket costs for individuals and families. According to NEJM, Republican candidate Donald Trump chose not to respond to their request for plan specifics, although he has states unequivocally in the past that repealing ACA is a top priority. Trump’s replacement plan hinges on deregulation and opening the free market to allow purchasing across state lines and more health savings accounts.

While much of the attention this election cycle is focused on the presidential race, a shift in which party controls Congress could have an equally significant impact on healthcare reform. No matter your individual political leanings, if you run a business, it’s critical that you understand how changes to the political landscape could impact your legal requirement to offer healthcare benefits. For example, Republicans are looking to the budget process as an opportunity to repeal ACA. Possible elements of a so-called “repeal and replace proposal” include removing the individual mandate and employer mandate.

As I discussed in an earlier article on the role of Congress and healthcare reform, eliminating the employer mandate to provide coverage could significantly change the healthcare landscape as we know it. Should Congress also add a premium tax credit for individuals without employer-sponsored coverage, this could dis-incentivize employers from offering coverage in favor of other benefits.

Even if Republicans take back the White House and maintain their lock on Congress, political pundits predict it is unlikely Republicans will hold enough seats – or maintain sufficient party unity – to completely repeal and replace Obamacare. In fact, the most likely outcome is that Republicans will allow states to become “laboratories of experimentation.” How could action by the state influence employee-sponsored health benefits?

What Changes are Coming at the State Level?state health insurance

One possibility to watch closely in 2017: states opening their health insurance marketplaces (also known as “exchanges”) to larger employers. A Health Insurance Marketplace, also known as a Health Insurance Exchange, is available in every state as a public option for individuals and small employers to purchase medical and dental insurance. Currently, states have three options for how they operate these marketplaces.

  1. A state may choose to establish and operate its own state-based Marketplace
  2. A state may choose to operate a state partnership Marketplace in collaboration with the federal government)
  3. A state may wholly defer to the Federally Facilitated Marketplace.

You can find a map of state, partnership and federal exchanges by state by following this link.

In 2016, 13 states chose option 1, 11 chose option 2 and 27 chose option 3. Small employers (1 to 50 employees) are allowed to purchase group insurance/HMO coverage for their employees on the Small Business Health Options Program (SHOP) Marketplace. Starting in 2017 with approval from Health and Human Services (HHS), states will have the option to open their Marketplace to larger employers.

This change would occur on a state-by-state basis, and would not be consistent for all states. States with older employed populations, for example, are less likely to open up their exchange. Such a change would also be of limited value to companies with multi-state employers.

States Innovation Waivers: What to Expect

Starting next year, states will be able to purchase “Innovation Waivers” (also known as 1332 waivers) that allow them to modify parts of ACA. Innovation Waivers are designed to allow states to develop their own approach to health care reform– as long as these reforms continue to provide “affordable, comprehensive health insurance.” States may request a waiver from ACA requirements related to private health insurance, subsidies and marketplaces, as well as individual mandates and employer mandates.

There’s a catch, of course. Even with a waiver, states must still offer a solution that stays within the limits of ACA. This means four things:

  1. Enrollment: The state must ensure coverage is at least as comprehensive as the ACA.
  2. Affordability: The state must ensure the solution provides coverage and cost-sharing protections against excessive out-of-pocket spending that are equivalent to ACA.
  3. Comprehensiveness: The state solution must cover a comparable number of residents.
  4. Deficit neutrality. The state solution can’t add to the federal deficit.

Finally, it’s important to note that the state waivers do not apply to Medicaid. States wishing to modify their Medicaid programs must seek permission under section 1115. This is completely independent of the Innovation Waiver under section 1332.

Confused? So are the states, apparently! Thus far, only a fraction of states including Hawaii, Massachusetts and Vermont have publicly released waiver applications. Both Hawaii and Vermont are seeking to waive the requirement to maintain a Small Business Health Options Program (SHOP) exchange. Instead, they’d like to allow small businesses to continue purchasing qualified health plans directly from insurers.

Other states are interested in modifying Medicaid under section 1115. In 2014, the Journal of Health Politics, Policy and Law published an article about the possibility of “super waivers” that would combine 1332 and 1115. Kentucky’s governor has expressed interest in pursuing a so-called “super waiver” or “twin waiver”, as are Arkansas legislators. Earlier this year, the Obama Administration published a list of guidelines for the 1332 waivers, which seemed to rule out a possible super waiver. However, given this year’s political climate, it’s possible a new administration could issue different rule.

ColoradoCare: A New Way Forward?

Another state to watch closely is Colorado. This November, Coloradans will vote on the “ColoradoCare” amendment. ColoradoCare would create a resident-owned, non-governmental health care financing system designed to provide comprehensive, affordable health care for every Colorado resident. It could be good news for businesses, too. Nationally, employers on average pay 13.5% of payroll for employee health care benefits, according to the Bureau of Labor Statistics. ColoradoCare would only charge a 6.67% premium tax on payroll. Plan proponents estimate that it would eliminate 59% of workers’ comp costs. The plan would virtually eliminate administrative burden on employers. Under the plan, employers would have no administrative responsibility for employee health benefits other than administering the payroll tax.

Final thoughts:

Innovation waivers give states the right to improve upon ACA. But with potential changes coming at the Federal level in 2017 pending the outcome of November’s elections, some states are holding off on releasing any plans. Additionally, it remains to be seen how many states choose to expand their exchanges to include larger employers. In the volatile state marketplaces, ballot initiatives like ColoradoCare are worth watching closely. These initiatives could demonstrate a new way forward for states– and have a significant impact when it comes to reducing employer healthcare costs and alleviating administrative burdens.

About
Scott Foster is President of Wellco.  Scott and Wellco have provided award-winning systems to measurably improve health conditions and costs.  Wellco specializes in engagement, metrics, integration and high-value care.  For more information visit, www.Wellcocorp.com

Permission to Reprint
You may reprint any items from Health Trends Blog in your own print or electronic newsletter. When you do, please include the following paragraph: Reprinted from “HealthTrendsBlog.com,” free, proven corporate health strategies and market intelligence from Wellco.  Learn more at www.wellcocorp.com. Copyright (c) by Wellco.

The Presidential Election & Health Care Reform: What Every Business Leader Needs to Know

White HouseFrom the future of the Affordable Care Act to how to control soaring pharmaceutical costs, health care is one of the biggest issues in this year’s election. The US spends more on healthcare than other high-income nations but for less effective care, according to reports. Both Democrats and Republicans are pushing for reform. But when it comes to the specifics of these reforms, Democrats and Republicans agree on very little.

During the Democratic primary, Bernie Sanders made a big push for universal healthcare earlier. Hillary Clinton’s approach, however, has been more cautious. Of all the candidates this cycle, Clinton is most closely aligned with the Affordable Care Act. She’s acknowledged that the current system is flawed and proposed a series of tweaks to reduce out-of-pocket costs for individuals and families. While not as far left as Sanders, Clinton did go so far as to offer a “public option” by allowing people the opportunity to buy into Medicare. Her goal is to “build on the Affordable Care Act and continue our march toward making sure every single American has health coverage,” according to her Twitter.

Donald Trump, in line with the Republican platform, is calling for an end to Obamacare. Trump’s replacement plan hinges on deregulation and opening the free market to allow purchasing across state lines and more health savings accounts. His stated goal is “maximum choice and freedom for the consumer” by ending Obamacare and replacing it with “something terrific, for far less money for the country and for the people,” according to his Twitter. This aligns with the Republican Party platform championed by House Speaker Paul Ryan.  Ryan focused on implementing health savings accounts, eliminating Medicaid expansion, and selling health plans across state borders.

The Affordable Care Act (ACA) and Health Insurance Mandates for Business Owners: Where Do We Currently Stand?

No matter your individual political leanings, if you lead a business, it’s critical that you understand how changes to the political landscape could impact employee sponsorship of health benefits. As it currently stands, ACA compliance isn’t easy. Full-time employee status documentation can be difficult for employers with seasonal employees or employees who do not work consistent hours within the “Look-Back” method measurement or “Stability Period”. ACA regulations amended The Employee Retirement Income Security Act of 1974 (ERISA), adding an additional paperwork layer of plan documents and notices.

Small business owners face an additional challenge. The ACA only mandates that businesses with 50 or more full-time employees offer health care coverage, which means businesses with fewer full-time employees may offer benefits at their discretion. These small business owners must weigh whether it is in the best interest of the business and their employees to offer group health insurance coverage. Currently, small groups have five main options for health insurance: individual insurance (with or without defined contribution allowance), SHOP Marketplace, private exchange, co-operative, and private small group plan.

Weighing the pros and cons of offering health insurance – or, which level of coverage if your business is mandated to do so – is not easy. And depending on which party wins the White House or controls Congress in the coming year, changes for individual and business mandates could be underway.

Will a Republican-led White House and Congress eliminate the individual mandate from the Affordable Care Act? Will a Democratic victory in November mean an expansion of Obamacare? And what about the so-called “Cadillac Tax”, a planned excise tax levy of 40% on high-cost health-benefit plans provided by employers to their employees?

Congress and Obamacare: How Does Control Affect Reform?

While much of the attention this election cycle is focused on the presidential race, a shift in which party controls Congress could have an equally significant impact on healthcare reform. While Republicans currently hold the largest majority in 90 years in the House of Representatives, a diversity of views within the party means that the leadership at times will struggle to maintain control. With few competitive seats in the House of Representatives, Republicans are likely to maintain their majority. In the Senate, however, Democrats are positioned to do well. Democrats must only defend 10 seats while Republicans must hold onto 24. Should Republicans maintain control over both the House and Senate, this will stymie continued Democratic reform efforts, even if Clinton wins the White House.

The budget process may be one avenue for Republicans to seek a full ACA repeal. Possible elements of the repeal and replace proposal include removing the individual mandate and employer mandate.

Potential reforms include the following:

–Allow insurers to charge more than ACA’s 3:1 ratio based on age

–Expand the availability and usage of health savings accounts (e.g., contributions beyond age 65, spousal contributions)

–Limit or eliminate tax excludability for employer-sponsored coverage

–Premium tax credits for people without employer-sponsored coverage

–Eliminating the employer mandate to provide coverage while adding the premium tax credit for individuals without employer-sponsored coverage could dis-incentivize employers from offering coverage.

Changes at the State Level

However, even with Republicans in the majority, it is unlikely they will hold enough seats – or maintain sufficient party unity – to completely repeal and replace Obamacare. The most likely outcome: continued gridlock in Congress means no comprehensive tax reform is enacted. Instead, more authority devolves to the states as Republicans allow the states to become “laboratories of experimentation.”

Regardless of the presidential election outcome, the biggest changes for health care coverage in 2017 may actually occur at the state level.  The next article in this series explores how action by the state could influence employee-sponsored health benefits.

About

Scott Foster is President of Wellco.  Scott and Wellco have provided award-winning systems to measurably improve health conditions and costs.  Wellco specializes in engagement, metrics, integration and high-value care.  For more information visit, www.Wellcocorp.com

Permission to Reprint
You may reprint any items from Health Trends Blog in your own print or electronic newsletter. When you do, please include the following paragraph: Reprinted from “HealthTrendsBlog.com,” free, proven corporate health strategies and market intelligence from Wellco.  Learn more at www.wellcocorp.com. Copyright (c) by Wellco.

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"HealthHammer sets the standard for health care ROI. Any business without HealthHammer is missing a real treasure."

Steve Rosser, Vice President, Johnston Lewis Associates

"Wellco is the best choice for businesses looking for measurable health care opportunities and wellness program ROI."

Dave Galli, Vice President, TapeMaster

"Wellco provides measurable outcomes that are critical to focus employee health efforts."

Craig Mulhinch, Vice President, Bosco's Pizza Co.

"Your programs are dynamite!"

David Bond, Senior Partner, Wiklund & Bond Financial Services

"There's no more using work as an excuse to avoid the doctor."

The Detroit News

"Meet the leaders."

Detroit Free Press

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