Health Care reform: one year later. One year wiser.

• Author: Arant, Daniel
• Position: WASHINGTON BEAT

The Patient Protection and Affordable Care Act (PPACA) marked its first anniversary in March, accompanied by a flood of medical double entendre as commentators acknowledged what is fast becoming conventional wisdom in Washington: health care reform is here to stay. Whether or not this is true, businesses are continuing to comply and assess their plans for compliance.

The difference between now and last year is that companies now have a slightly better sense of what compliance with PPACA means--what the law requires and how much it is likely to cost. But, there is still a long way to go.

Since last year, the Departments of Health and Human Services and Labor and the Internal Revenue Service have finalized several rules that are primarily aimed at reforming the insurance industry. Of particular concern to businesses is the requirement to cover adult dependents up to age 26, which has slightly increased costs.

Other provisions enacted last year--such as the abolition of lifetime dollar limits on most benefits and requirements to provide free preventative care on certain services--will likely increase costs further as they expand coverage and make health insurance plans more generous.

A Colorado Department of Regulatory Agencies investigation found that PPACA provisions were responsible for as much as 5 percent of the total increase in premium costs to some businesses in that state. Still other provisions scheduled to come into effect in 2013 and 2014 may exact an even higher cost on business than the early rhetoric implied, with the employer mandate provisions noteworthy. Referred to as "play or pay"--implying employers that provide insurance will not be subject to fees--that is not the case.

The law requires employers with more than 50 employees to offer health insurance or pay a fine for workers who get coverage on their own. But, even if an employer provides options, the employer will still be subject to penalties if a single employee cannot afford employer-offered coverage and chooses to participate in a state-run exchange. Also, the $3,000 penalty is multiplied by the number of full-time employees who receive premium credits in an exchange.

The past year has also demonstrated provisions that will require the most adjustment and how businesses plan to cope with them. Of increasing concern is the so-called "Cadillac Tax" on high-cost plans, which takes effect in 2018 and is causing businesses to consider significant changes in their...