To pay, or to play, that is the question!
Whether you like it or not, the Affordable Care Act (ACA) is law. And in 2013 this means that we’ll continue to see truckloads of regulations implementing the law, politicians locked in heated debates about the law’s cost, colorful maps showing which states will implement the public exchanges and/or expand Medicaid eligibility, and Americans
left scratching their heads wondering what all this drama will ultimately mean for the quality and cost of their health insurance.
In the meantime, those of you in corporate HR departments are likely busy implementing the law’s employer mandates and trying to interpret the piles of new regulations. You may also be focusing on the ultimate question, the big kahuna, the elephant in the room, the question that must-not-be-named (Harry Potter reference)…Will we pay or play in 2014 and beyond? Maybe the kick-off conversation in your organization will go something like this:
VP of HR: “Our consultants just showed us what our health care trend will be through 2020 if we continue to offer the same benefits we’ve been offering.”
CFO looks down at the report and snipes: “It’s going to cost WHAT?!?!”
VP of HR: “Precisely the problem. Not to mention that we’ll have a Cadillac tax problem at some point and we also owe a shared responsibility penalty because we have some full-time employees who are not currently benefits eligible. So people, we have a decision to make: first, do we continue to offer health insurance coverage?” (For now, the majority of employers are answering yes to this question.) “If so, then should we continue offering health insurance coverage but implement significant modifications to control costs?” (For instance, moving to a high deductible health plan or joining a private exchange.) “Or three, should we stop offering coverage and, if so, consider subsidizing our workforce with additional compensation?” (Consider the employee relation consequences and headline news coverage.)
So, to prepare for that inevitable conversation, here are some issues to consider before choosing your strategy:
- What are your workforce segments (e.g., full and part timers, union, adjuncts, benefit eligible, corporate, etc.)?
- What are your obligations (e.g., nondiscrimination rules, wage and hour laws, collective bargaining agreements)?
- Have you considered your industry and competition (e.g., will you be the first in line or a lemming)?
- What is the progress of the state exchanges and what might that mean for a multistate employer?
- Is your health care strategy consistent with your broader human capital strategy?
- Have you considered all the options (e.g., the rise of new private exchanges)?
- What are the administrative challenges of each option (e.g., the benefits and drawbacks of outsourcing)?
- How important is it to control your workforce health, which not only affects health plan costs, but also productivity, absenteeism and presenteeism?
- Do you need to consider global workforce consistency and equity?
- What is your corporate philosophy about being an employer of choice?
- What are the costs associated with each option?
You may not have all the answers yet, but I’m willing to bet these questions will spark spirited discussions within your organization. And I suspect this will be an ongoing conversation for all of us in years to come. Do you agree?
Tami Simon is managing director of Buck Consultants’ Knowledge Resource Center