SALT LAKE CITY — Beginning next month, employers large and small will start open enrollment for health care benefits — a process that will involve the implementation of the controversial Patient Protection and Affordable Care Act.
While passage of the law requiring most employers to provide health insurance has been seen by some as a major victory for workers, the reality of putting the plan into place has been a big headache for many companies forced to follow the 2,700-page measure that even members of Congress have said they don't completely understand.
The aim of the ACA, also known as Obamacare, is to increase the quality and affordability of health insurance, lower the uninsured rate by expanding public and private insurance coverage, and reduce the costs of health care for individuals and the government.
However, some critics argue the measure could increase insurance premiums for many employers and individuals because the law requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or age.
Speaking Tuesday at a news conference at the annual Small Business Summit at the Salt Palace Convention Center, Salt Lake Chamber president and CEO Lane Beattie said the new law will be a big change from the way employer-based health insurance has been handled traditionally.
“This is a significant shift in the way that we have done health care in this country for many, many years,” Beattie said.
Right now, (we see) about a 5 percent to 8 percent increase in our health insurance plan from last year to this year. Next year, it's my understanding that there is going to be a 100 percent to 400 percent increase.
–Eric Sessions, co-owner of Intelitechs
According to a survey conducted by the Cicero Group for SelectHealth, 90 percent of local business leaders say it's very important to provide health care for their employees, but the ACA is perceived negatively by the majority of businesses.
Many are unhappy because they have to comply with confusing and unfamiliar rules and regulations, said Greg Matis, senior counsel for SelectHealth.
Matis said some business owners believe the ACA will cause greater confusion for employees’ health coverage, largely due to more paperwork and hassle.
The survey indicated that business leaders are largely uninformed about the requirements of the ACA, with 81 percent admitting they were unsure of all the requirements needed to be fully compliant.
Julie Christensen was among the business professionals in attendance at the conference. Christensen, human resources manager with Propeller Inc., a Provo-based logistics and fulfillment services company, said she came to the event with 1,000 questions about the health care law and fortunately was able to get many of them answered.
Christensen said her company of about 25 people would likely be best served by using Avenue H, the state’s Internet-based information portal connecting consumers to information regarding health care coverage options and financing.
“That’s probably going to be the best benefit for our employees and more affordable because they can get individual policies,” she explained.
The Avenue H system will provide a streamlined option for processing health care related claims for companies and their workers, as well as giving them more control over their provider choices, Christensen said.
She said the information she learned at the conference has left her more informed about the ACA and much less fearful about its potential impacts.
“I thought mostly the big change would be that they would bump up the (insurance) prices like crazy in order to give everybody coverage,” Christensen said. “But it looks like my younger employees’ rates will go up, but my middle-age and older employees' rates are going to go down.”
While Christensen and others may have found relief in the education they received in the conference workshops, not everyone is excited about the potential impacts of the new health care law.
Eric Sessions, co-owner of Intelitechs, an information technology consulting firm based in Woods Cross, said his small firm of five people — all under age 31 — can expect to see their insurance premiums increase drastically when the plan is fully implemented.
It's a very delicate balance that these employers are trying to figure out. They've got to pick a strategy that works from a people perspective and from a budget perspective.
–Aaron Call, G&A partners
“Right now, (we see) about a 5 percent to 8 percent increase in our health insurance plan from last year to this year,” Sessions said. “Next year, it’s my understanding that there is going to be a 100 percent to 400 percent increase.”
The hike is a result of the changes in the way premiums will be set under the ACA, where younger, healthier, insured individuals are asked to pay more to offset the relatively lower rates charged to older individuals who would typically pay higher premiums and use more services.
“We’re a young company, and that’s why we stand to see the majority of the increase,” Sessions said. “For a small business to absorb all that additional expense is a big pill to swallow.”
He said the company might have to consider utilizing the Avenue H health exchange as an alternative to providing coverage to its employees as a way to decrease costs.
Aaron Call, vice president of Utah operations for G&A Partners, a human resource outsourcing and administrative services provider, said many companies may resort to using outside administrators to mitigate the expense and compliance aspects of health care coverage under the ACA, which will begin taking effect as early as 2014.
“Because there is still so much about the law that is unknown … it’s an unnerving thing (for employers),” Call said.
He said employers should work at developing a strategy that will help their companies make it through the initial implementation process with the understanding that some parts of the plan will likely change as lawmakers observe the impact the new law is having on the nation.
“It’s a very delicate balance that these employers are trying to figure out,” Call said. “They’ve got to pick a strategy that works from a people perspective and from a budget perspective.”