Seminar: Uncertainty remains regarding health-care reform

Employers have plenty of changes to keep track of this year due to the 2010 federal health-care reform law, even though it faces an uncertain future, according to speakers at a health-care seminar May 11 in Syracuse. 

“Two years into it, we’re still left with a lot of uncertainty and a lot of court challenges,” says Maureen Pelose, vice president for employee benefits at insurance brokerage firm Brown & Brown Empire State. “It’s going to be a challenge for health plans and employers.”

Brown & Brown Empire State, which has its Syracuse office in Suite 200 at 500 Plum St., held the seminar at the Genesee Grande Hotel at 1060 E. Genesee St. in Syracuse. About 90 people attended the seminar, which was titled, “Health Care Reform — What it Means to You and Your Business.”

The federal reform law faces an uncertain future, as the U.S. Supreme Court heard arguments on its constitutionality in March. The court is expected to issue a decision in June that will either keep the law in place, invalidate parts of it, or throw out all of it.

Elections in 2012 add another layer of uncertainty to the law’s future — Republicans have signaled they want to unravel at least part of the reform package if they win more power in Washington, D.C. this fall, Pelose said.

Even so, Pelose briefed employers on issues that are arising as the law’s reforms roll out. One of those changes has to do with the W-2 forms employers issue to their workers. Forms that large employers distribute for 2012 will have to include the aggregate cost of most employer-sponsored health benefits.

“This only applies if you’re filing a W-2 for 250 of your employees,” Pelose said. “If you’re under that amount, you’re excused from that filing for the 2012 deadline.”

Employers should also know about Summary of Benefits and Coverage (SBC) documents, Pelose said. Insurers have to start providing SBCs, which present information about insurance plans in a standard format, for employees in new and renewing plans starting Sept. 23.

Some tax changes are on the way as well, Pelose said. Starting in 2013, the Medicare hospital-insurance payroll tax for employees is slated to rise for single taxpayers with wages exceeding $200,000 and married taxpayers with wages over $250,000. The rate is currently 2.9 percent, and the new tax will tack on an additional 0.9 percent.

Fully insured and self-funded plans ending after Sept. 30, 2012, will also be subject to a premium tax, according to Brown & Brown. That tax is $1 per covered life for the first year and jumps to $2 per covered life for later years.

Additionally, Pelose mentioned an excise tax on high-value “Cadillac” health plans that is scheduled to take effect in 2018. The tax, which will be 40 percent, is supposed to kick in on single plans with an aggregate value over $10,200 and family plans with an aggregate value of more than $27,500.

Although few plans have that value today, price increases could make the “Cadillac” tax a possibility for more plans by the time it takes effect, Pelose said.

“It’s not something that we should just brush off,” she said. “We’re watching it.”

Looking further ahead, 2014 will bring an employer mandate requiring companies with more than 50 full-time workers to offer health insurance or risk paying a penalty, Pelose added. The penalty, which is $2,000 per full-time employee per year, will be levied if an employee who wasn’t offered health insurance through work purchases insurance on New York State’s planned individual health-insurance exchange — and that employee is eligible for an income-based premium credit.

The insurance exchange is another part of the health-care reform package that should be on employers’ minds, Pelose said. In addition to an exchange where individuals can purchase insurance, there will be an exchange that is a place for small businesses to shop for coverage for their employees, she said.

The exchanges will be web-based, according to Todd Muscatello, senior vice president of Rochester–based Excellus BlueCross BlueShield, who also spoke at the seminar.

“Has everyone used Expedia?” he said. “At its highest level, that’s what an exchange is. It’s a website where you will be able to go as an individual or a small employer and compare health-insurance options.”

The exchange will likely increase the number of health insurers a small business must interact with, Muscatello said. That’s because employers who use exchanges to offer their workers insurance won’t select a specific insurer. Instead, they will pick a benefit level and employees will be able to log on to the exchange and choose between insurance companies offering plans at that level, he said.

“In today’s world, as a small employer, you likely offer only one product, maybe two, but usually with the same company,” Muscatello said. “In tomorrow’s world, that would likely not be the case.”

Muscatello recommended staying tuned as New York constructs its health exchange. The state is only starting to build the exchange, since Gov. Andrew Cuomo ordered its implementation in April, he added.

“We’re still a little bit away from understanding how this is really going to work,” Muscatello said. “As you go forward, the best you can do is stay abreast of it. It’s going to impact you in some way.”

Brown & Brown Empire State is a full-service insurance brokerage firm that also specializes in employee benefits, estate planning, and surety bonding. In addition to Syracuse, it also has offices in Endicott and Clifton Park. It is a unit of Brown & Brown, Inc. (NYSE: BRO), headquartered in Florida.