Employee Benefits - Health Care Compliance Risks

In 2010, the United States created The Affordable Care Act (ACA). The objective was to share the responsibility of costs between the government, individuals, and employers to provide affordable access to quality health insurance. “However, health coverage remains fragmented, with numerous private and public sources, as well as wide gaps in insured rates across the U.S. population.” (“United States: International Health Care System Profiles,” n.d.). Each individual state within the US, generally has control over private insurance.

Employers are continuing to face rising health benefit costs and are constantly looking for alternatives to control these escalating costs. Health benefit premiums continue to increase at a double digit pace for employers and employees (Poor, Ross & Tollen, 2004). This escalation is putting environmental pressures on all impacted stakeholders. Companies and insurance providers are squeezing this industry to get a handle on cost while still providing an appropriate level of care. This cycle puts the patient front and center as the ultimate stakeholder who incurs changes in health benefits. This mandate of cost control, efficient operations and market share has facilitated a constant analysis of the dynamic health

The Affordable Care Act is considered to be a landmark legislation that sought to bring changes to overhaul the health care system within the United States. While the ACA has brought necessary improvements and changes to how health care is handled, it has also directly affected many stakeholders within the health care industry. The major stakeholders of health care are considered to affect each and every aspect of the massive industry, and can be influential. This paper will be specifically addressing the effects of the ACA on the employer stakeholder group. It will talk about the new responsibilities and taxes employers must face, how the ACA is currently affecting employers at the moment and into the future, how the employees and their dependents will be affected by these changes, and finally what strategies employers can take to mitigate

Employers should offer affordable( employee premium less than 9.5% of employee’s wages) and of minimum value( employers must pay at least 60% of insurance cost) healthcare benefits to their employees depending on factors like number of FTE, number of employees receiving premium tax credits and other complex measurements to calculate the amounts. Employers should also notify employees by written about State exchanges, and advise them that if an employee decides to purchase a health Plan through an exchange, they may lose the employers’

The changing landscape of the current health care system in the United States has caused new methods of insurance to gain in popularity. The High-deductible health plan (HDHP) is increasingly favored by employers and offered on the exchanges created under the Affordable Care Act (ACA). According to the Centers for Medicare & Medicaid Services (CMS) a HDHP is “a plan that features higher deductibles than traditional insurance plans. High deductible health plans (HDHPs) can be combined with a health savings account or a health reimbursement arrangement” (2015). In the HDHPs premiums are lower, offset by the higher deductible. The health reimbursement arrangement (HRA) the employer contributes to a fund for medical expenses while in the health savings account (HSA) which employees pay into but is not required of the employer (Shi & Singh, 2012, p. 208). The growing popularity of these plans is important as it will have effects on the healthcare costs as well as how consumers use healthcare.

Companies across the nation have been faced with an increase in the cost of employee health insurance. Over the past five years health care costs have risen by 54% (Thorpe). The decision to be made now is how to handle these increases in the most convenient way. Flexible spending accounts (FSA) and healthcare savings accounts (HAS) have become the main focus of this discussion. Many believe the unrestricted FSA still remains the most helpful account while others prefer the newly developed, user owned, HAS.

The Affordable Care Act (ACA), also known as Obamacare, was a major overhaul to the healthcare system, affecting both employers and employees. The ACA, along with rising healthcare costs, means employers have had to make changes in their healthcare plans and as a result, employees are seeing the affects, good or bad. As Fitzgerald (2014) points out, as the ACA gets closer to full implementation, more organizations will begin backing away from providing health care coverage. Part of the problem that organizations are facing in the future is the so-called Cadillac tax. As explained by healthaffairs.org (2013), the Cadillac tax is an excise tax on high-cost insurance plans and will mostly be paid for by the organizations. The tax, beginning in 2018, is a 40% excise tax on the cost of coverage for health plans that exceed a certain annual limit (healthaffairs.org, 2013). Because of this high tax, many companies are scaling back on coverage and finding ways to shift the cost to employees (Angle, 2014). The analysis presented will describe what ACA is, the problem GMFC faces, possible options, and finally, a solution for GMFC in this case.

Large corporations typically self-insure paying their employees' medical bills and hiring insurers to administer health benefits, while small businesses purchase group health coverage from insurers and face cost-increasing regulations as they go through the annual ritual of renewing their coverage. The Affordable Care Act (ACA) says that an employer must provide full-time employees with comprehensive health insurance for businesses that have over a certain number of employees. While businesses under a certain number of employees won't get penalized for not offering coverage. This is important because if you are a small business employee with very little take home, this gives you the option to allot that money for coverage or not. The cash value

Many employees must designate a health plan through their employer. These days, as HMOs (health maintenance organizations) and managed care plans continue to proliferate, that means a choice between bad and worse. As employees line up in the lunch-room for a process called open enrollment, they may be surprised to learn that managed care rates have gone up — again. The mirage that managed care is cheaper care is finally fading. And, for the first time in years, employees may also have the promise of free choice in medicine in the form of a new method of financing health care. Consumers are already aware of horror stories involving HMOs, but cheap rates persuaded many that managed care is less expensive. Recent

As the new healthcare law takes effect insurance premiums are expected to rise. On average for the last six years insurances premiums have gone up six percent per year. The average annual cost that employers pay to cover their employees is around $10,000 for each employee. Usually employees are responsible for 20 percent that total or $2000. At this time the new law has done

Businesses are left with an even bigger challenge. The Affordable Care Act requires small businesses to provide health insurance regardless if they are able to come up with the money for it (Stevens & Harler, 2012). Businesses that exceed 50 full time employees will be forced to make available health insurance; if they do not, they will be subject to a $2,000 penalty for every employee working there (Stevens & Harler, 2012). The benefit is that the company’s first 30 workers will be deducted and will avoid the fee (Stevens & Harler, 2012).

A series of events has recently occurred to cause the passage of PPACA. Economics are explicitly linked to health care. In the United States, health care coverage is provided primarily through an employer-based system. This system began in the depression era when pay was federally frozen. Companies, in an attempt to lure scarce workers, used benefits packages including health care as bait. Described as a “uniquely American” “private social security” health care system, the employer-sponsored system is the “cornerstone” of United States health care system (Blumenthal, 2006). This system has left many un- or under-insured. Blumenthal states (2006), “The United States’ dependence on employer-sponsored insurance means that the protection of its citizens against the costs of illness depends directly on the ability of private businesses to manage and absorb health care expenses that have defied all efforts to contain them.” Recently, economic downturn and the need to reduce expenses to better compete on the global market has caused many companies to both reduce their insurance benefits package and their work force causing many to lose their health care coverage. The employer-based system merged with the economic downturn, unaffordable health care costs for businesses, and

In 1954, Congress passed legislation allowing employers to provide health insurance benefits to employees on a tax-free basis (Sih and Singh 99). This legal provision marked the beginning of the rapidly expanding health care costs still apparent today due to the major incentives provided by the government to obtain employer-based health coverage. The overwhelming popularity of employer-based health insurance has led to a serious market inefficiency resulting from the system of third-party payment. As individuals rely on their insurance companies to pay for their medical expenses, this provides

The Federal Employee Health benefit program is the largest employer health insurance program in the United States, insuring about 3 percent of all Americans. There are 133 plans, offering 188 coverage options that are participating in the FEHBP as of 2003. Preferred provider organization (PPO), fee-for-service plans, and Health Maintenance Organization (HMO) all offer options. The government’s contribution toward the cost of the beneficiary’s premium is “lesser of 72 percent of the average FEHBP plan premium, weighted by enrollment, or 75 percent of the premium for the plan chosen” (Karen Davis) .

The higher cost of affordable Health care is also eroding the ease with which to afford other insurance that covers about 30 percent of Medicare enrollees ‘expenses. In 2005, about 89 percent of beneficiaries obtained such additional coverage, including through former employers (33 percent), medical policies (25 percent), Medicare advantage plans (13 percent), Medicaid (16 percent), or other programs (1 percent) (MedPAC). These supplemental insurance programs were all very helpful at the onset, but with the passage of time and as health care costs continued to rise, employers are finding it difficult to support these programs and as a consequence, a greater number of these employers are either reducing the benefit or eliminating these benefits especially those that affects their retirees thereby increasing the cost of these supplemental insurances.