At the October 2013 ASBO International Annual Meeting & Expo in Boston there were several sessions on healthcare reform and its impact on school districts and staff. Even though the law was passed in 2010 we’re still talking about it, and as we start 2014 it’s almost hard to believe that this really is no longer a new topic. It may be that healthcare reform has had a lot of top of mind staying power due to the longer term implementation timeline, the periodic release or revision of regulations, the (unsuccessful) constitutional challenge, and even perhaps due to confusion about what the law and regulations require. If you’re anything like me, even before the 2013 AME you probably attended at least a couple seminars on the Patient Protection and Affordable Care Act (PPACA), but still may not feel that you know everything there is to know about it and what you should or need to do next. While this won’t be a full-fledged review of PPACA, hopefully this blog will provide some insight on key aspects of the law, some ideas on what you might be doing at your district, and give you a forum to ask about and comment on some of your areas of interest or concern. Some of the blog will be based on material that I co-presented with Gallagher Benefit Services at the 2013 AME on The Impact of PPACA on Budgeting, Bargaining & Compliance, and I expect to include some blog postings from my partners as we explore this topic.
To start us off, let’s consider a couple of the top traps that we need to avoid as we kick of 2014.
Trap #1: Waiting
We are now at the point in the evolution of PPACA where employer and individual mandates, and insurance exchanges are coming into play. We are also getting closer to the 2018 start of the “Cadillac” excise tax. With many collective bargaining agreements ranging from 2 to 4 years in length, some of us may have only one more opportunity to bargain costs and benefits related to healthcare reform before 2018. Whether we bury our heads in the sand or not, some of the regulations are upon us and we need to prepare or act. Right now there is a delay in the implementation of Employer Shared Responsibility penalties, but the extra time that we have is needed to be sure that we can act to avoid or minimize costs. If you are waiting and hoping that things will change or that you can quickly take care of what you need to later this year, you will likely find yourself exposed to additional costs or penalties. More on the specifics of what you should be preparing for later, but this leads us to…
Trap #2: Failing to understand our cost exposure
There are a variety of costs related to PPACA that may affect school districts. Some are direct costs or penalties such as those related to mandatory plan design changes (such as eliminating pre-existing condition exclusions for all health insurance enrollees), the Cadillac tax, and coverage for variable hour employees who work 30 hours per week or more on average (such as substitutes). Other costs include additional resources or outside services for tracking and reporting information, such as W-2 reporting of healthcare benefits, marketplace notices, and total hours worked across the district by variable hour employees. Some of these costs require assumptions and estimates, but it is critical to understand the potential magnitude of new costs that you may be faced with. It is only with some idea of this that you can begin to develop a strategic response that will ensure that you have a cost effective benefit that will allow you to attract and retain quality staff, and that you have the appropriate financial resources available to fund it.
Today’s two traps are pretty general and high-level. In the next post we’ll get into two other, more detailed, traps to avoid, namely Trap #3: Failing to update our Summary of Benefits and Coverage and Trap #4: Not tracking employee hours and not recognizing insurance eligible employees. After that look for more information on the employer shared responsibility, Cadillac tax, bargaining, and strategic total rewards and decision making.