The Fort Worth Chamber of Commerce’s 2011 Health Care Summit will explore the impact of federal health care reform, wellness initiatives and more during a half-day session Nov. 4 at Southwestern Baptist Theological Seminary.
Presented by the law firm of Cantey Hanger, the summit will open at 7:30 a.m. with a breakfast presentation by Randy Reichert of Live Healthy America, a non-profit, web-based national wellness program funded by the Iowa Sports Foundation and the Richard O. Jacobson Foundation.
Federal health care reform under the Patient Protection and Affordable Care Act (PPACA) will be under the microscope in two sessions.
Cantey Hanger partner and PPACA expert Quitman “Q” Stephens will examine the legalities of health care reform mandates.
A panel of representatives from various-sized businesses will discuss their preparations for full implementation of PPACA.
Todd Whittman, president and CEO of Cooper Concepts, a division of the Cooper Aerobics Center, will conclude the summit with a look at how companies can help employees pursue healthier and happier lives.
There’s much uncertainty in the business community regarding PPACA, which is being phased in but will go into full effect on Jan. 1, 2014, said Stephens, a member of Vision Fort Worth, the Chamber’s Young Professionals program.
“I’m seeing a wait-and-see approach,” he said, “and that stems from two things – uncertainty about what’s in the law” and whether the law will survive current legal challenges at the U.S. Supreme Court level.
Those views were reflected in results from the Chamber’s recent Health Care Benefits and Policy Survey sent to top-level executives and HR managers. More than 140 responded. More than half of them said they have limited understanding of PPACA; 38 percent said they lack details to prepare for compliance.
Although 42 percent said their health insurance costs increased 6-15 percent over the past year, 52 percent said the increases have not impacted their ability to either hire new employees or expand operations. Most said the health insurance industry is capable of finding ways to lower insurance costs through competition and collaboration with health care providers.
Employee healthcare benefits are expected to rise 6.8 percent next year in North Texas to an average of $11,504 per worker, according to benefits consultant Aon Hewitt. Nationwide last year, the average annual premium for a family covered through an employer increased 9 percent, to $15,073, a Kaiser Family Foundation study found.
“A lot of folks are watching the (PPACA-related) cases that are wending their way through the court system with respect to challenges to the constitutionality of the so-called individual mandate that requires individuals to carry coverage or be subject to an excise tax,” Stephens said.
It’s important to understand, he said, that “the individual mandate is severable. The law is designed so that if that provision is struck, the rest of the law stands.”
Repeal of PPACA “seems highly unlikely,” Stephens said. “To repeal a law, you have to enact a new law, and it has to be approved by both houses of Congress and signed by the president.” That’s another unlikely scenario, he said, given the extent of divisiveness in Congress.
Uncertainties notwithstanding, “every business needs to sit down with their lawyer and review their operations” in light of PPACA, Stephens said.
National Association of Insurance Commissioners’ PPACA compliance summary.
Expanded Q&A with Q Stephens
Uncertainties confound businesses’ preparation for health care reform
Following are excerpts from a Q&A with Cantey Hanger attorney and partner J. Quitman “Q” Stephens. A specialist on the Patient Protection and Affordable Care Act (PPACA), Stephens will discuss health care reform in a session at the Chamber’s Nov. 4 Health Care Summit.
What reaction to the Patient Protection and Affordable Care Act are you seeing in the business community?
The reaction I’m seeing from many is a “wait-and-see” approach. That stems from two things – uncertainty about what’s in the law and whether the law will stand, either because it would be repealed or struck down by the courts as unconstitutional.
First, it seems highly unlikely the law will be repealed, for two reasons. To repeal a law, you have to enact a new law, which has to be approved by both houses of Congress and signed by the president. When you consider the current climate in Washington, getting both houses of Congress to agree on anything (even the time of day) seems like a tremendous challenge. Additionally, the new health-care-reform law is, in many ways, a form of glorified health insurance reform. In that regard, it features many “consumer-friendly” provisions – such as the prohibition on denying coverage to someone because of pre-existing condition – which will build a constituency for the law among the American public. To some extent, you are already seeing this “mood change” among Americans with respect to the law in recent polling data.
Given those two realities, it seems unlikely to me that the law will be repealed, with the result that most of the major provisions in the law will go into effect on Jan. 1, 2014 – including, of concern for most employers, the so-called “employer mandate,” and its accompanying “teeth,” in the form of excise taxes for failure to offer health insurance constituting “minimum essential coverage.” Other provisions phase in before then – including some that are already in effect — and I’ll talk about some of those in more detail on Nov. 4.
Next, some people may be taking a “wait-and-see” approach with respect to the law, because they are watching the cases that are wending their way through the court system with respect to challenges to the constitutionality of the so-called “individual mandate,” which requires individuals to carry health insurance coverage or be subject to an excise tax.
It is unclear to me how that will ultimately work out before the United State Supreme Court, so I will not attempt to “read the tea leaves” and predict. But, if the individual mandate is struck down, that portion of the law is written to be “severable” from the rest of the law. In other words, even if the “individual mandate” – which requires individuals to carry certain, minimum, health insurance coverage – is struck down, the rest of the law will stand and go into effect.
From a functionality standpoint, however, it’s difficult for me to see how this whole structure works if the “individual mandate” – which, ironically, was originally a Republican proposal from 1993 from the GOP’s alternative to the Clinton Administration’s health-care proposal, the so-called “Hillarycare” bill, but was co-opted by the Democrats in PPACA – fails to pass constitutional muster, and here’s why. As I mentioned, the law is, in many ways a glorified form of health insurance reform, imposing new rules upon what private health insurers can do with respect to issuing and providing coverage, as well as terminating coverage, such as the prohibition on preexisting condition exclusions — as well as other reforms, such as the prohibition on insurers placing lifetime or annual maximum limits on benefits and the prohibition on discrimination by insurers in providing coverage with respect to certain, enumerated “health-status”-related factors.
The grand bargain of the law is that it requires that 30 million-plus new insured to be forced into the system, many of whom are young and healthy — referred to in the congressional debate as the so-called “young invincibles” – younger individuals who believe that – erroneously, I think — that they’re just not going to get sick or injured, and so they choose not to pay for health insurance coverage. Now, you and I know it’s not a question of if you’re going to get sick or injured, but when. In exchange for forcing these 30-million-plus new insured into the system, the law imposes all of these restrictions and reforms on health insurance providers yet spread the risk out over that now-much-bigger risk pool, with the net effect of reducing premiums from the (sky-high) jump they would likely take if such reforms were imposed in the absence of such a larger risk pool.
But one additional point I would add here is that my job is being a compliance lawyer – advising my clients on how to comply with, and not run afoul of, the law. My practice area is in employee benefits and ERISA, but also this new, health care reform law – PPACA. And in that role, I’m interested in the mechanics of compliance. It is my job to give my clients my best judgment in terms of advice on how to comply with the law, and my best judgment on how to best protect their interests with respect to operating in compliance with the law – and ensuring that they steer clear of any penalties, taxes or other compliance problems. With respect to being “for” or “against” the law – that’s not my job. I’m not a politician. I’m not going to enter that debate, and I will leave that to others to debate.
What are a couple of steps businesses should take now to prepare for compliance with PPACA?
Every business needs to sit down with their lawyer and review their operations, what they have in terms of health insurance coverage and whether it will be sufficient to meet the standards in the new law going forward and how to avoid getting into a compliance problem, as well as the the taxes such compliance failures necessarily entail..
With respect to the “employer mandate” to provide coverage, the rule of thumb is that if you have 50 or more fulltime employees, you’re going to have to provide coverage under the law that meets certain minimum standards or you’ll be subject to tax. The tax for failure to provide such coverage is generally calculated on the basis of $2,000 X the number of employees each year. The law works mechanically on a month-by-month basis to calculate that tax, so you take 2,000 X 1/12 X the number of employees for each month. Each employer should sit down with their counsel and review what coverage they provide, whether there are 50 or more fulltime employees or 50 or more fulltime equivalents, such that they would be subject to this new “employer mandate.” Employers who have 49 or fewer fulltime employees will not be required to provide coverage.
Note also that, at the beginning of this process, there was a big debate about whether employers would drop coverage and pay the tax because it would be cheaper to do so, because generally speaking, if you do the math, it actually will, in many cases, generally be cheaper to drop the coverage and pay the tax rather than provide coverage and take a deduction for cost of providing the coverage. But, with that said, I still believe it’s highly unlikely that most employers will drop coverage. Why? Because all employee benefits are just a form of compensation, and when you are an employer trying to attract the best employees, there’s an expectation that you’ll offer benefits – including health insurance. I don’t see how you can compete as employer (in hiring the best employees) if you don’t offer benefits such as health insurance.