Health care worries businesses

New law has created uncertainty about financial impact of providing coverage

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COEUR d'ALENE - Business consultants have been facing "a lot of nervous business owners" following the upholding of the new health care reform, said Lance Fenton, CPA at Cooper Norman.

Speaking on a health care reform panel on Thursday morning at North Idaho College, Fenton said most companies worry how they'll be impacted financially.

"We're trying to put their minds at ease," Fenton said.

Thursday morning's forum on the Affordable Care Act, presented by PacificSource Health Plans, glossed over the law's requirements for businesses.

Companies with at least 50 employees will have to provide workers with health care coverage. Or, they can pay a $2,000 penalty per employee they don't insure, who will instead seek coverage through health insurance exchanges provided by the state or federal government.

Companies of any size must educate their employees about their insurance options.

The Congressional Budget Office has projected that under the new act, the number of uninsured will drop from 50 million today to 22 million by 2016.

Panelist Stephen Cilley, CEO of Ataraxis, Inc., said he didn't think many Idaho businesses would be dramatically affected by the new law.

"Most businesses in Idaho aren't over 50 people," said Cilley, whose Boise company handles employee services for businesses.

But panelist Shelli Stayner, with Mercer human resource consultant, said there is debate among small employers over whether to rely on a state insurance exchange, if one is created.

It's hard to make that decision, she said, as Idaho hasn't decided if it will create its own exchange or use a federally operated marketplace.

"No one today knows what (a state exchange) is going to look like, and whether it will be competitive," she said.

A significant impact the new health care law will have on Idaho employers, Cilley said, is the requirement that employees who work 30 hours a week will qualify for health care coverage.

"That one piece could really redefine how you treat somebody as an employee," Cilley said. "That changes a lot of things for a lot of employers."

Businesses might reconsider their structure, Stayner said.

"If you have people working 31 to 35 hours, should you now have them work 29, so you don't have to provide insurance?" she said.

Cilley also noted that some businesses, like restaurant chains, might want to break up their parts to avoid coverage.

"They can break out their companies to maybe 40 or 45 people, making each restaurant its own corporation, and they wouldn't be required to offer health insurance," he said.

More coverage regulations might still be implemented down the road, he added, which he believes possible because the act is such a "widely open written" law.

"More importantly is not what do we know right now for 2014, but we've got to watch almost every day, every week and ask, what are they coming out with?" he said.

Panelists said there is no clear indication yet if the penalty for not providing employee insurance, determined by the Supreme Court as a tax, could be deductible.

Cilley was emphatic that Idaho should develop its own health care insurance exchange.

He predicted Idaho insurance premiums would "at best double" if the state was operated on a federal exchange, he said, in which case Idaho would be pooled with states with notoriously unhealthy populations.

"Throw us into those, there's really no way we would not double," Cilley said.

Stayner said the reform will have little impact if states choose not to expand their Medicaid coverage.

She pointed out that about 27 million would be covered if every state expands coverage.

"Every state that says you know what, we're not going to do it, all those people fall into the black hole that says I'm not going to qualify for Medicaid, and I'm not going to qualify for a (insurance exchange) subsidy," she said. "We're going to have the same uninsured population tomorrow as we do today."

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