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VIA panel helps guide business owners

Experts use pre-submitted questions to focus discussion of how to deal with the Affordable Care Act

Posted: September 18, 2013 2:00 a.m.
Updated: September 18, 2013 2:00 a.m.

Ross Pendergraft of USI Insurance Services moderates a panel on healthcare reform for VIA at the Valencia Country Club on Tuesday. Josh Premako/Mellady Direct Marketing

 

Santa Clarita business owners packed the Valley Industry Association’s luncheon Tuesday to hear a panel of industry experts address the Affordable Care Act – ACA - which is now looming over every business owner’s head.

And many small businesses in particular, without the support of in-house benefits departments, feel overwhelmed by the requirements and find it hard to make good decisions.

“Healthcare reform is here to stay,” said Ross Pendergraft, executive vice president of USI Insurance Services.

Moderating the discussion, Pendergraft invited other specialists to help answer pre-submitted questions from business owners facing deadlines in which to make decisions.

As business owners agonize over the best course of action – whether to insure employees or not and let them move into the state’s health exchange program, Covered California – panelists urged people to remember why their firms offered benefits in the first place – to attract and retain the best talent.

From day one, small companies have felt that ACA is a “giant regulatory hammer about to hit business owners on the head and take their checkbooks,” said Chris Patton, vice president with Covered California. Patton focuses on on small business health options.

But, that’s really not the case. What ACA represents is making more options available to the business owner, he said.

“It represents another group offering,” Patton said. “And it helps to attract and retain good employees and reduce absenteeism.”

Although penalties for businesses were delayed one year, employers still need to notify employees about their options under the healthcare law by Oct. 1.

While the executive suite leaders are sick of talking about the topic, a recent survey showed that less than 5.5 percent of employees have any clue about healthcare reform, said Mark Wilbur with Employers Group.

It’s important too for companies to explain why the healthcare options they offer should be attractive for employees.

“If too many employees choose to leave, a company’s plan could be at risk,” Patton said.

The first enrollment period under the ACA program runs from Oct. 1 through March 31, 2014. After that, open enrollment for the state’s health insurance exchange program will only occur once a year in January.

Business owners feel besieged by increases in taxes and regulations, said Stephen Landsman with Square Milner, Peterson, Miranda & Williamson LLP.

“Most clients are resistant to compliance issues and see them as obstacles to growth,” Landsman said.

“But, the process of evolution is not asking how to get out of it (ACA), but how to stay competitive and keep good employees,” he said.

One area that is confusing some companies is the requirement that employees working more than 30 hours a week be covered by insurance - and how to assess hours worked, said Karen Kirkpatrick with Infinisource.

“Employers can choose to track an employee’s hours to see if they work 30 hours per week, or 130 hours a month,” Kirkpatrick said. “An employer can choose one (method) or the other, but it must be consistent in what it tracks.”

Also under the new healthcare program, coverage is considered affordable if employee contributions are less than 9.5 percent of income.

But, companies grappled with how to define income. There had been confusion as to whether an employer needed to know the entire household income for an employee.

Not any more, Kirkpatrick said. Businesses are only responsible for offering healthcare coverage fees based on the stated income on an employee’s W-2 form.

Wilbur reminded the group also that any plan offered by a company must pay for at least 60 percent of the costs of covered health services.

For as many decisions that must be made, there is one potential bright spot according to one of the panelists.

“California is one of only 17 states with its own health insurance exchange,” Landsman said. “That could make it attractive to new residents and businesses.”

Companies can find more information at www.hbex.ca.gov.

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