The New Healthcare Law – Part 4 on the Affordable Care Act
Even before the Affordable Care Act (aka PPACA or ObamaCare if you prefer) is actually implemented, word-of-mouth stories continue to mount concerning people who have lost hours to keep them at fewer than 30 per week or 130 per month to avoid them being considered ‘full time’. Similar stories continue to mount about people who have been advised that they will lose their health care plans when the new year arrives because the employer is simply dropping its plan knowing that the ‘exchanges’ will be available to their employees.
If you are an employer, you know that the cost of health care plans continues to rise even before the creation of ObamaCare. The rate of increase simply due to inflation was high enough to give employers heartburn each year as they made decisions about what they could afford and asked themselves questions about how their employees would react.
The new world of health plans is influenced by inflation just as in the past. But those same plans are also influenced by changes that are being made law come January 1st. Those changes include the elimination of any clauses limiting coverage for people with pre-existing conditions. Those changes include the collapsing of premium rate bands so that rates for a 64 year-old can be no more than three times the rate for a 26 year-old. These are the two changes that probably make the most difference in costs.
Those employers that have a calendar year health plan arrangement have received or are soon to receive the renewal premium rates for 2014. The heartburn has increased for the great majority of those employers. We have seen actual rates for one employer that were increased by 21% year over year for the current plan. That is significantly higher than the health care cost inflation rate, and that suggests that the Affordable Care Act played a significant part in the increase.
We suspect that a change in what has been the norm for the employer-employee relationship may be forthcoming over the next several years. Employers will, if the cost impact is as large as some have predicted, be looking at any and all possibilities to enable them to remain competitive in the marketplace. Employees will very probably see more changes over the next few years, as well. Not all of these changes are going to be a pleasant experience for either employers or employees.
We at WFA Staffing are mindful of this phenomenon since we are also experiencing it just as are all other employers. Our crystal ball is likely a bit cloudy today as is that of most employers, but we are committed to make our way through the changes just as we have for many years. We are committed to helping our employer clients and our employees, temporary and full time, as they each work their way through the changes. We prefer to look at the new opportunities as opposed to lamenting about change, and we suspect that you are too! Give us a call and we’ll see if we can help you find opportunities, as well.