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HR Leaders Get The Final Word; More Work Ahead As Obamacare Moves Forward

With the final Supreme Court decision on Obamacare madeHR Leaders face a plethora of options, most of which are not attractive in either the short or long run.

Every analysis done in the past 12 months, including those completed by government agencies, indicates before the decade is out, businesses will be paying considerably higher rates for healthcare insurance.

Whether they choose to adopt a policy of paying into a government fund for not offering healthcare insurance, or provide funding for employees to purchase insurance through exchanges, the end for small businesses will be more expenses.

For larger employers, the regulations will more likely push their companies to adopt Consumer Directed Healthcare plans such as Health Savings Accounts (HSAs) or Health Reimbursement Accounts (HRAs)

No one in or out of government argues healthcare insurance rates will decline as the act requires insurance providers to accept all applicants and to provide additional benefits regardless of the company’s workforce makeup.

There are also limits on growth imposed by the graduated implementation of requirements as the workforce numbers increase.

For 2013, the smart decision, some experts suggest, is to reduce or eliminate employee healthcare insurance by smaller companies.

The penalties over the next four years are far less than the cost of offering such policies.

Given the current control of the House by republicans, these fees are not expected to increase although there are provisions in the law that permits the Administration to raise them without Senate or House consent.

Rohit Arora, CEO and co-founder of Biz2Credit believes this will have a negative impact on hiring by smaller enterprises. However, larger employers may also start to rethink hiring plans which are also reported to be much lower for the remainder of 2012.

“The Supreme Court’s ruling removes a major source of uncertainty surrounding this important national issue. With all of the law’s provisions still in place, employers will need to redouble their compliance efforts, especially regarding such immediate requirements as providing summaries of benefits and coverage to their employees,” said Julio A. Portalatin, President and CEO of Mercer.

The individual mandate, which has sparked fierce political and legal debate, requires most Americans to have adequate health coverage starting in 2014 or pay a penalty. Also in 2014, employers that fail to offer full-time employees and their dependents affordable coverage with a minimum value likewise will face penalties.

“Employers can expect a spike in plan enrollment for 2014 as a result of the individual mandate,” said David Rahill, President of Mercer’s Health and Benefits business. “But they may see enrollment level off once the state exchanges become operational.”

By 2014, health insurance exchanges will be operating in every state, offering community-rated insurance to certain small employers and individuals, with federal premium tax credits available to help some people buy that coverage.

In the near term, employers also must report the value of employer coverage on IRS Form W-2, cap dollar limits on health care flexible spending arrangements, and increase Medicare withholding for high earners (those earning more than $200,000 per year). They must also comply with the reforms already in effect, such as coverage of dependents up to age 26.


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