Employers approaching major health care decision deadlines

The Patient Protection and Affordable Care Act mandate for businesses finally goes into effect on Jan. 1, 2015, meaning that many companies across the country will have to start making hard and fast decisions about the ways in which they will approach insuring – or not insuring – their employees going forward. As a result, there could be a serious impact on as many as several million Americans in the coming months.

Starting the first day of next year, companies with 100 full-time employees or more will be required to either provide those workers with a health insurance option or face a substantial per-person fine for everyone that goes without coverage, according to a report from the Atlanta Journal-Constitution. Today,about 94 percent of companies that fit that bill already provide such coverage, and thus, don't have to make many decisions, but the 6 percent that do not do so could go through major issues.

The fine for these companies is sizable on a per-employee basis – $2,000 after the first 80 workers – if companies do not attempt to insure at least 70 percent of their employee base, the report said. Therefore, the dilemma for companies (and, via a trickle-down effect, their workers as well) is that it might be cheaper in 2015 for those companies to take on that fine rather than insure those workers. However, the fines ratchet up significantly in 2016 – at which point the rules will also apply to employers with 50-plus workers – and could continue to grow down the road, as well.

What's going to happen?
Fortunately for workers at these companies, it seems that most that do not offer coverage are also unlikely to just eat those fines, though some still may choose to do so, the report said. Most would rather pay a little bit more and get something for it than throw thousands of dollars toward fines that don't benefit anyone but the federal government. Some experts say that employers could pay anywhere between $250 and $300 per employee, per month, for even the most bare-bones coverage.

For these reasons, it might be wise for health insurers to start finding new ways to offer employers options in this arena. Concerns about rising costs are well-founded, but also unavoidable. As a result, the more that can be done to meet companies' needs, the better off policy issuers might be when it comes to finding new corporate clients.