The Patient Protection and Affordable Care Act

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There is a direct cost as a result of ACA, with costs associated on a per employee basis, and individual company basis, and the larger corporate sector. A summary of a study found that over the next decade, the cost of ACA to large corporations of 10,000 or more employees is estimated to be between $4800 to $5900, per employee. This would break down to an increase of 4.3 percent in 2016 and 8.4 percent by 2023, over what they would be spending in the absence of ACA. The total costs of ACA to all of the large U.S. employers over the next ten years is estimated to be between $151 billion to $186 billion (Troy, T & Wilson, D. 2014).

There are many direct costs associated with the ACA. Some of these costs include:

• Temporary Reinsurance Fee;

• General ACA implementation and administrative costs;

• Excise tax on high-cost plans;

• Mandate to cover adult-children up to age 26 as dependents

• Other benefit mandates including covering 100 percent of preventive care services (Troy, T & Wilson, D. 2014).

A recent survey the two of the biggest concerns that employers have with the ACA are the increase in administrative work and the taxes on high-cost plans. The survey notes that 42 percent of employers would be subject to the taxes in 2018 if these employers made no changes to their current plans. This has resulted in many organizations raising deductibles, unbundling dental and medical coverage, and moving to high-performance networks (Brubaker, J. 2012).

Employers, HR professionals and benefit managers have always been challenged with administrative and compliance requirements, the offering of enticing and beneficial benefits, while keeping in mind the controlling costs. With the introduction of ACA, employers are considering new approaches to benefits, healthcare insurance, and the funding and delivery of benefits overall.

Organizations and companies are looking at three different options that include the outsourcing of benefits, the use of private exchanges, and the consideration of self-insurance for their employees. Due to greater compliance and administrative issues as a result of ACA, one in three employers is expected to outsource their benefit programs. These employers recognize the need to meet their employees needs and the desire to help them make better choices about their benefits.

HR professional and benefit managers need to become aware of the changes, and how it impacts their employees and the company. Two of the outstanding issues are the requirements to provide affordable insurance and the limits on benefits and the changes to the payroll and yearend tax statements. As of 2013, year-end tax statements need to list the amount of money that a company spent insuring their employees.

Along with these changes, HR professionals are required to inform and educate the employees on the ACA law and benefits, and what they as a company, is obligated to do for the employee. This includes explaining the current health care options, what the employee is required to pay to receive the benefits, and what portion of the insurance the company is liable to offer the employee. Employees will also be educated in their legal requirement to purchase the coverage.

HR professionals need to be aware of the regulations of the act, how best to comply with the act, and how to educate and make employee aware of their responsibilities, as well and the responsibility of the organization, as the Affordable Care Act is one of the most significant forms of litigation that has been passed in decades (McCarthy, J. 2012).

References

Amadeo, Kimberly. "Is Obamacare Worth It?" The Balance. N.p., 11 Aug. 2016. Retrieved from:

https://www.thebalance.com/obamacare-pros-and-cons-3306059

Brubaker, J. F. (2012). Employer Obligations Under the Patient Protection and Affordable Care Act. Allen Wellman McNew Harvey, LLP | Greenfield, Indiana. Retrieved from

http://www.awmlaw.com/EMPLOYER-OBLIGATIONS-UNDER-THE-PATIENT-PROTECTION-AND-AFFORDABLE-CARE-ACT.shtml

Lorenzen, Richard. "Is The Affordable Care Act Really Bad For Business." Forbes. Forbes Magazine, 22 Apr. 2013. Retrieved from:

http://www.forbes.com/sites/theyec/2013/04/22/is-the-affordable-care-act-really-bad-for-business/#20733b29457a

McCarthy, J. (2012, July 23). What do Human Resource Managers Need to Know about the Affordable Care Act? Retrieved from

http://www.humanresourcesmba.net/faq/what-do-human-resource-managers-need-to-know-about-the-affordable-care-act/

Rosenbaum, Sara. "The Patient Protection and Affordable Care Act: Implications for Public Health Policy and Practice." Public Health Reports. Association of Schools of Public Health, Jan. 2011. 126(1): 130–135

Secretary, HHS Office of the. "Key Features of the Affordable Care Act." HHS.gov. N.p., n.d. Web. Retrieved from

http://www.hhs.gov/healthcare/facts-and-features/key-features-of-aca/

The Affordable Care Act (Obamacare) and Small Business | Signs.com. (n.d.). Retrieved from

https://www.signs.com/obamacare-and-small-business/#.V7NU0bgrLcs

Troy, T. & Wilson, D. Mark. (2014). The Cost Of Affordable Care Act To Large Employees. Retrieved from http://www.americanhealthpolicy.org/content/documents/resources/2014_ACA_Cost_Study