Employers who think the Affordable Care Act is complex have three basic choices, the president of an insurance brokerage said Wednesday.
The first option is to shift the cost of health care to their employees and stop offering insurance, said Den Bishop, president of Holmes Murphy & Associates, who was in Omaha to talk with clients about health care reform.
The second is to share the constantly rising health care costs with employees, as most employers are doing now.
And the third is to influence those costs as a business strategy by battling disease and steering employees toward the best medical care for the lowest price.
Of the three — shift, share, influence — only influence attacks the real problem with health care, Bishop said, which is its unaffordable cost.
“Disease is the enemy,” he told about 40 people at a morning seminar on the topic, repeated in the afternoon. “It's not the hospitals. It's not the insurance companies. It's not the federal government.”
If they haven't already made the choice, Bishop said, employers will face that decision as more parts of the federal law take effect during the coming year. Politics and the complexity of the law and its regulations have obscured the clear choices that face employers who view health coverage as a basic benefit for their workers.
Businesses are finding out that they can save substantial money by adopting policies that “produce less disease” among employees, Bishop said, such as requiring that employees take part in wellness programs that lower the incidence of heart problems, diabetes and other common diseases.
Employers have no problem requiring factory workers to wear safety glasses, he said, yet they balk at requiring participation in wellness programs. Both offset risks that can be costly to employers.
He said he expects most employers will continue to offer roughly the same health insurance coverage in the next few years as more provisions of the Affordable Care Act take effect. Many observers believe that only about 2 percent of working Americans will end up using the health insurance exchanges that will be set up starting this fall.
Beyond the highly publicized exchanges, Bishop said, other parts of the health care law offer more promise in tackling the high cost of health care.
For example, the increased transparency of health care costs and outcomes will help employees and employers choose effective, less-costly providers. The law's Accountable Care Organizations offer ways to control costs, such as providing health care warranties so that people don't pay extra for failed treatments.
Once employers decide to provide health care coverage for their workers and influence the cost, Bishop said, the key factors are to reduce the amount of treatment needed by keeping workers healthy and to choose lower-cost, higher-quality health care providers.
Once that is underway, Bishop said, employers should look at the type of insurance coverage they have, picking the best for the lowest cost. “That's the game for the employer who wants to reduce costs.”
Bishop said the law may be revised but is unlikely to be repealed because some of its provisions are too beneficial to the federal government. For example, the law's cap on Medicare spending will reduce the federal deficit sharply as the years go by.
He also believes the cost of the law could end up requiring taxation of employees' health insurance benefits, which now are listed on employees' W-2 federal income forms. Listing the amount on W-2s sets up the administrative method for imposing a tax and allows the government to calculate exactly how much money such a tax would raise.
The Affordable Care Act doesn't call for such a tax. But Bishop said a tax is likely in part because advocates of a tax will point out that it's not fair for an employee to pay for health insurance with pre-tax dollars while other people have to buy their insurance with post-tax dollars. There are a variety of ways benefits could be taxed, he said. For example, the tax might apply only to people with total incomes above a certain amount.
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