David Kolhoff, friend and former colleague at Lincoln Financial Group, has graciously agreed to become a contributing author to this blog. Dave is one of the best benefits lawyers I know, and is more than willing to take me to task when he believes it is necessary to do so-and I am more than willing to return the favor, as appropriate. For well over a decade, we have jointly presented something called the "Bob and Dave Show," where we have entertained benefits professionals in this region by actively discussing the benefits issues of the day. I look forward to reading his posts and continuing our long-standing dialogue, and think you will enjoy them as well.
Dave’s first post is on the Affordable Care Act. Though most of us retirement law types would prefer to turn the other way when it comes to the new healthcare law, we really cannot. The following is his initial take on the Act’s impact.–Bob Toth
The Patient Protection and Affordable Care Act (the “Act” or “Affordable Care Act”) was signed into law early in 2010 and was the subject of much controversy and media attention for much of the two years before it was enacted. Yet today there remains an amazing lack of understanding about even the basic requirements and concepts found in this seminal legislation.
For example, at a panel discussion at a local university less than two weeks ago billed as “Obamacare and You: What Obamacare Means for Business and Healthcare in Fort Wayne,” a very successful business owner described how some of her fellow business owners were considering increasing their number of part-time employees and, thereby, reducing their number of full-time employees below 50 in order to avoid being an “applicable large employer” subject to the Affordable Care Act. The panel included a CEO of a large regional health insurer, chief physician of a large regional hospital system, professor/MD from a medical college and the successful large business owner and one of her staff. The moderator was a professor from the university who apparently had spent a great deal of time understanding the Act. He had a slide that described the “Patient Portability and Affordable Care Act.” Of course, the requirements of the Act cannot be avoided by turning full-time employees into part-time employees and the name of the Act doesn’t include the word “portability.”
While this lack of basic understanding in these two instances might be the exception rather than the rule, that does not appear to be the case to me. And while it is true that the “individual mandate” and state exchange requirements do not come into effect until 2014, there are many other requirements already in effect and even employers with grandfathered plans should have already been paying close attention and planning for implementation of current, near future and farther-off 2014 requirements.
The Affordable Care Act is singular in my experience for acceptance of a wait-and-see attitude. While I understand that the Supreme Court decision less than five months ago may have caused many to adopt such a wait-and-see attitude and even as I write this article two days before the presidential election, I understand some may still have that attitude. That I think has been and is a mistake. No matter what the outcome of the court decision in June might have been or the presidential election in two days may be, the Affordable Care Act is here to stay in many very significant respects. Employers may, for example, find themselves with increased tax liabilities under the Act because a state in which they operate chooses not to expand its Medicaid coverage despite the federal government paying for almost all of that expansion. If the employer has low wage employees who would have been covered under the Act’s Medicaid expansion, but now cannot afford to participate in the employer’s plan, all as described in the Act, the employer may incur tax liability. Such an employer may look with disfavor on providers and others who advised that they wait before working on issues and problems that might arise under the Act.
While we all have to work issues in a priority order that makes sense given all of the surrounding circumstances, it appears to me that most employers and their providers have not paid sufficient attention to the requirements of the Affordable Care Act. While I don’t think that doing so post-election will be too late since it’s always better “to work” a problem, I do think that the ability of employers to influence what the final product looks like has been degraded by the lack of greater effort over the last couple of years.