With Obama remaining in the White House, what should you expect from ObamaCare?
The re-election of President Obama means ObamaCare – the federal health care reform law – is here to stay. But post-election statements from some business owners might make employees worry that the new law could mean slashed hours, skimpier paychecks or even pink slips.
Experts, though, have some advice for workers. “Don’t panic,” says Amy Bach, executive director of consumer advocacy group United Policyholders.
Experts, including Bach, say the health care reform law will help many consumers get better coverage. And they say workers will be able to take action by filing complaints with a government agency if they think their employers are trying to escape requirements of the federal Patient Protection and Affordable Care Act, which goes into full effect in 2014.
The law will require businesses with more than 50 employees to pay a fine if they don’t either provide health insurance for employees who work 30-plus hours a week, or pay workers enough to buy their own coverage without government aid.
Immediately after the presidential election, John Schnatter, CEO of the Papa John’s pizza chain, drew national attention when he said it was “common sense” that the chain’s franchise owners would cut employee hours to avoid the requirement to provide insurance for workers.
And an owner of 40 Applebee’s restaurants in the New York area, Zane Tankel, appeared on Fox Business to say he might be forced to stop hiring, cut hours or lay off workers.
But an October 2012 report from the Urban Institute Health Policy Center, a nonpartisan nonprofit that does independent research on health policy, says that for small businesses with fewer than 100 employees, the new law actually reduces the costs of providing coverage for employees. The report says that for large businesses with more than 1,000 employees, costs will remain about the same.
However, for businesses with 101 to 1,000 employees, the cost of coverage will go up by 9.5 percent starting in 2014. That’s mostly because more employees will enroll in health insurance plans at work, the report says. However, the health care reform law will help small businesses that currently don’t offer health insurance, as it will allow them to compete better with bigger companies in employee recruitment, according to the report.
Threat to small businesses?
Experts say business owners might not follow through on their warnings about making cuts in hours and staff. Some business owners are engaging in “political posturing,” meaning they are making statements to try to influence federal agencies that are hashing out technical rules about, for example, how to determine whether a worker is full- or part-time, says Cheryl Fish-Parcham, deputy director of health policy at Families USA, a nonprofit advocacy organization for health care consumers.
Bach agrees: “I’m hoping statements made by the Papa John’s CEO were more political puffery than anything else.”
However, a 2012 survey of 1,200 businesses by benefits consulting firm Mercer suggests Schattner’s predictions might carry some weight. Of employers that do not offer health insurance to employees working at least 30 hours a week, about half of them said they plan to change schedules so fewer employees work that number of hours.
About 8 percent said they would just pay the penalty for not offering coverage, and 3 percent said they would stop offering coverage altogether. On the flip side, 24 percent of those employers said they would let all employees join the health plan they offer only to full-timers.
Many small business owners are worried about what kinds of management decisions they might have to make to comply with the new law, says Kevin Kuhlman, manager of legislative affairs at the National Federation of Independent Business, a lobbying group for small businesses. Kuhlman says his group regularly receives calls from members who want to know how the law will affect them.
Kuhlman says concerns about the cost of complying with the health care reform law could push employers that are just a little past the 50-employee mark – where businesses must pay penalties if they don’t provide health insurance – to cut employees so that they can fall below that level and avoid penalties. The law also means more money likely will go toward benefits, leaving less money for pay raises, he says.
It’s true that businesses that currently provide skimpy, high-deductible health insurance with fewer options might end up paying more under the new law, says John Rother, president and CEO of the National Coalition on Health Care. However, other business owners will be facing the same costs. “So, that’s probably pro-competitive,” he says.
Employers generally want to provide health insurance for their employees, Fish-Parcham says, because they know healthy employees are good workers, and employees hunt for jobs based on benefit offerings.
“All those incentives to provide insurance will still be there,” Fish-Parcham says.
How can employees prepare for the changes?
Workers can do a few things to try to prepare themselves for changes under health care reform, experts say.
• Talk with your boss now about how much you value health insurance, Fish-Parcham says. If you took your job partly because of the benefits, let your employer know that.
• If you have health insurance that you’d like to keep, don’t make any changes to your plan, Bach says. Certain health care plans will be grandfathered into the new health care reform law, she says, meaning that people who like their coverage can keep the plan they have. However, according to HealthCare.gov, that also means plans that existed before March 23, 2010, are exempt from some requirements of the new law. For example, these plans do not have to provide free preventive care, such as routine checkups. “If you like your plan, now is not best time to make changes,” she says.
• Make sure you keep copies of benefits materials you get from your employer and health insurer in a safe place, Bach says. It’s a good idea to have detailed records of your benefits in case any changes or snafus crop up as health care reform rolls out.
• Learn your rights and your employer’s responsibilities by visiting HealthCare.gov, a website maintained by the U.S. Department of Health and Human Services. “It’s an excellent, very user-friendly site,” Bach says.
• Realize that if your employer tries to skirt the law, you’ll be able to take action, Bach says. Because specifics are being worked out, it’s not clear exactly which government agency will take complaints or how such reports will be handled, experts say.