LIMA —The turn of the calendar will mean lots of changes for businesses and health care consumers, resulting from implementation of the Affordable Care Act.
Jonathan Archey, Ohio Hospital Association’s government affairs director, gave a primer Thursday at Rhodes State University on the changes and what is included in the federal law.
While some people believe the law is “the end of the world,” Archey said, and others think it’s “the greatest thing since sliced bread,” most people don’t know what’s in it.
The thing most people do know about is the mandate to carry health care coverage. About 30 percent of the country’s population, including a third of children, already are covered by Medicare or Medicaid. The requirement to have insurance is why the insurance industry supported the law, Archey said, even though it makes many reforms to their business.
Here’s a partial list of what the law does:
• Requires people to carry coverage or face a fine paid on their taxes
• Requires dependents to be covered up to age 26
• Caps deductibles
• Requires 80 to 85 percent of premium dollars to be spent on clinical care
• Requires some preventative care without copays
• Prohibits insurance companies from dropping sick people
• Prohibits insurance companies from charging women higher premiums
• Limits amount insurance companies can charge older clients
• Requires state-based health benefits exchanges
• Expands Medicaid eligibility in states that choose it.
• Requires businesses with at least 50 full time equivalent employees to provide insurance or face fines, and provides tax credits for businesses with 25 or fewer employees that provide insurance.
Businesses and employees have been struggling with health insurance costs for some time. It was primarily the rising cost of care that spurred the federal health care reform law, Archey said.
Today, 25 percent of small businesses don’t have health insurance, Archey said, and 28 percent of self-employed workers don’t have health insurance. Overwhelmingly, business owners say the reason they don’t provide health benefits is they can’t afford it. There’s a reason for that: Healthcare costs have increased 1.5 times faster than wages, and the average total premium for employment-based insurance for family coverage is more than $11,000 a year.
Size matters when Jan. 1 rolls around, because the size of a business determines whether the government will require it to provide health care coverage. No business with fewer than 50 full time equivalent employees has to provide coverage. Since 2010, for businesses with fewer than 25 full time equivalent employees, the government provides a tax credit to those that choose to do so. Nearly 86 percent of businesses with employees in Ohio are eligible for the tax credit, Archey said.
In 2014, any business with 50 or more full time equivalent employees will be required to provide coverage. Archey said 96 percent of all businesses are exempt from any requirement to offer health insurance. And, 96 percent of all businesses with more than 50 employees already offer health insurance.