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Healthcare Reform: Big, But Not Altogether Clear Changes
March 24, 2010

At more than 2,300 pages, the sweeping $940 billion health care reform bill that President Obama signed into law yesterday will take a long time to digest. It will take even longer to understand the impact of the legislation’s fine print and subsequent administrative regulations for the nation’s employers and their employees. So, we thought it most helpful at this time to give you an overview of the legislation and offer an early analysis of it.

Overall, the bill does not call for a government-financed public option and the federal government won’t be setting prices on health insurance premiums. Unfortunately, the legislation does little to address the costs of health care, which from our perspective was the whole point of health care reform in the first place. In addition, there are concerns – particularly locally – about whether there are enough medical professionals to meet the demand of the additional people that will be coming into the system. Beyond that, there seems to be an early consensus that it is unclear what this will mean for business in New York State where some of the federal plan’s cost savings for small businesses could be negated by the Empire State's many existing mandates and taxes on health plans.

Here is a look at some of the other key points of the bill:

• By 2014, states will be required to have an exchange that could include a Small Business Health Options Program (SHOP), where small businesses will be able to join together to buy insurance. (“Small businesses” are defined as those with less than 100 employees). This could end up similar to what the Partnership has done for decades in offering health insurance to its members at competitive rates.  

• Individuals will be required to carry health insurance ... regardless of whether it is offered by their employer, they receive it through a government program or they purchase it themselves through health insurance exchanges. Starting in 2014, businesses with more than 50 employees will be responsible for providing affordable health care coverage, with a complicated formula for penalties (on the employer) for their workers who utilize subsidies.

• Businesses with fewer than 25 employees that choose to offer coverage will be eligible effective in 2010 for tax credits up to 35% of premiums to help provide insurance to their employees.

• This legislation creates a temporary reinsurance program (until the exchanges are available) to help offset the cost of expensive health claims for employers that provide health benefits for retirees age 55-64.

The Buffalo News hit the mark when they titled their analysis of the health care reform: “Wanted: User manual for health care overhaul.”  Various aspects of the full legislation would be enacted over a four year span beginning later this year through 2014. The Business Council provides a detailed synopsis of the mandates of the legislation for individuals and employers in “Beyond the headlines: Some Things To Plan for in Federal Health Care Reform Implementation”.

The Wall Street Journal article “What’s in the Bill” provides a more detailed look at the key parts of the bill and outlines when each component goes into effect, while CNNMoney.com’s “What health care reform means for your business” gives a useful look at specific provisions of the bill and their financial impact on business.

With the Senate vote on the legislation looming, it’s possible (although not highly likely) there will be changes to what’s been approved so far. Moreover, we know there will be future legislation proposed regarding what’s not in the bill. We urge you to be diligent in staying abreast of these subsequent actions and their potential impact on you and your business. As your regional business advocate, we will do our best to pass on relevant/important information as it becomes available.