Are businesses prepared for the impacts of the ACA?
By Paul Houchens
The U.S. Chamber of Commerce recently released a survey of approximately 1,300 executives from companies with 500 or fewer employees on small business outlook. A number of questions concerned whether the executives and their companies were prepared for the impacts of the Patient Protection and Affordable Care Act (ACA). The survey’s ACA-related findings include:
• 49% of executives listed the ACA as their biggest current challenge
• 79% believe the ACA will make health coverage more expensive
• Nearly 25% indicated the ACA is their biggest obstacle to hiring
• Most importantly, only 30% of executives indicated they are prepared for the ACA and have an understanding of the participation requirements for the health insurance exchanges
The ACA is a challenging law for employers of all shapes and sizes to understand. Unfortunately, its complexity, combined with the uncertainty caused by the legal challenges and implementation delays, has caused many employers to be less proactive or to struggle with their strategic planning. In addition, many of the tools that are available to assist employers with the ACA do not provide the right level of information and analysis to fully understand the impacts of the changes.
I believe employers of all sizes need in-depth, customized financial analysis to understand the true impacts of the ACA to their organizations. Analysis that simply scratches the surface of the ACA requirements may not provide an executive with the knowledge to make decisions that may have significant financial ramifications, along with impacting employee attraction and retention.
In recognition of the need to provide small businesses with in-depth financial analysis related to the ACA, I have collaborated with a team of Milliman employer healthcare reform experts to create the Milliman HCR Dashboard. Whether your organization is an employee benefits agency, insurer, benefits law firm, or CPA firm, licensing the HCR Dashboard can give your organization the power to provide your small and mid-size employer clients with the knowledge that will allow them to make informed decisions about the ACA.
Key HCR Dashboard modeling results include:
• Assessment of employee household income distribution by key ACA federal poverty level (FPL) tiers
• Estimated employee premium and cost sharing under the employer’s plan relative to silver or bronze plans in the exchange (including applicable cost-sharing subsidies)
• Estimated impact of adjusted community rating reflective of the employer’s state and insurance carrier (small employers only)
• Assessment of whether a plan design is compliant with ACA requirements for actuarial value, deductible level, and out-of-pocket maximum
• Evaluation of the number of employees with unaffordable coverage based on employee income or estimated household income
• Estimated salary increases by employee household income level to make employees “whole” for losing coverage
• Financial impact of terminating plan, on a pretax and post-tax basis, with and without salary adjustment
• Assessment of potential eligibility for small group tax credit (small employers only)
• Preliminary self-funding analysis
Contact us to learn more about the Milliman HCR Dashboard and how you can provide your clients with the ACA guidance they need.