2012 Health Care Change Requires Better Communication
While employers saw sweeping transformations of their health care offerings in the last two years following the adoption of the Patient Protection and Affordable Care Act, this year's changes are mostly focused on simply keeping employees better informed about their coverage.
Starting in 2012, employees will know exactly how much money their employer is contributing to their individual health care costs. Employers who issue more than 250 W-2 forms need to report the cost of coverage for each employee on those year-end tax documents.
The requirement won't kick in until 2014 for businesses with fewer than 250 employees.
Ash Hachmeister, a consultant with Indianapolis-based MJ Insurance, said he believes providing employees with the true picture of their insurance costs will help them realize exactly how much they're really earning on the job.
"A lot of employees don't understand what their (total) compensation is from their employer," Hachmeister told BusinessNewsDaily. "I feel it is a good thing for them to be educated on it."
Employers also will be required to provide new health care summaries that have been reformatted with an eye for clarity.
The new four-page summary must be given annually to employees with their open enrollment materials; it also will be distributed to new hires, special enrollees and eligible dependents, and to anyone at any time upon request.
"Communication needs to be easier for the employee to understand," Hachmeister said of the benefit summaries. "They still don't have a grasp or understand what their benefits are."
In addition, when benefits are changed employers must now provide notice in writing at least 60 days before the changes are instituted.
Starting in September 2012, employers who offer health care also will be assessed an annual fee to fund patient-centered outcomes. The money will benefit the Patient-Centered Outcomes Research Institute, created to conduct research aimed at providing information that helps patients and health care providers make more informed health decisions.
Through September of 2013, the amount assessed is $1 times the average number of covered lives under the plan. That fee increases to $2 in October 2013. Those additional fees are scheduled to stay in place through 2019.
The largest change planned for this year under the original Patient Protection and Affordable Care Act had been a requirement for business owners to submit IRS 1099 forms for payments for goods and services totaling more than $600 in a year. A bill signed this spring by President Obama, however, repealed those expanded 1099 filings .
"Small-business owners are the engine of our economy, and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork," Obama said in a prepared statement after signing the legislation.
Hachmeister said the upcoming smaller changes to the health care system all are leading up to 2014, when the biggest change, access to affordable insurance through insurance exchanges, is scheduled to go into effect. Also that year, the second phase of the small-business tax credit goes into place, allowing for credits of up to 50 percent of the employer’s contribution to provide health insurance for employees. That tax credit is currently at 35 percent.
Though this year's health care changes seem comparatively minor, Hachmeister believes it is still critical for business owners to be aware of what they are dealing with.
"Although conversations around health care reform have quieted down some, it should still be on the minds of executives," Hachmeister said. "As parts of the law continue to go into effect, organizations should keep informed and assess the impact, compliance and costs associated with health care reform moving forward."
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