Is your health care planning up to date?

AuthorHeiser, Scott
PositionHEALTH CARE - Legislation

Chief financial officers must prepare their companies not only for the first wave of health care mandates, effective for most plans with their renewal on Jan. 1, 2011, but also for the long-term effect of the changes that will take place through 2014 and beyond.

Decisions about how companies structure and manage their labor force will need to be reviewed and analyzed. It's clear that the health reform rules will affect industries differently. Service industries such as health care, hospitality, food service and retail will experience a profound impact requiring significant review of their current labor structure.

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Others will also be required to adjust benefits strategies in light of coming changes, depending upon their particular mix of full- and part-time employees, benefits offered, contribution structures and the participation of employees in those plans.

The following provides insights on making health care planning a long-term, strategic business initiative and offers ways to educate employees on coverage options and benefits changes.

Beginning with the End in Mind

Health reform is not a topic to be viewed in a vacuum. It must be considered in light of overall corporate planning due to its financial and human resources impact. An executive team should be formed to identify long-term business goals and personnel requirements and develop a plan to meet those goals in light of the impact of the significant changes that are ahead.

Changes in benefits or health plan costs are likely to have a ripple effect on overall compensation structure and corporate budgets, creating a challenge in attracting and retaining quality employees. If a business is already facing a shortage of skilled workers or if it historically had low participation in health benefit plans, the requirements of health reform will be an important variable in its staffing equation.

By 2014, businesses will be responsible for paying for every employee working 30 hours or more per week, by enrolling all eligible employees in the group-sponsored health care plan. An annual $2,000 penalty would be imposed for every eligible employee If the employer does not offer coverage. The regulations are not final, but the law includes enough different scenarios and penalty calculations to make it difficult to accurately quantify the exact financial impact for most businesses.

Many considerations will go into deciding whether or not to offer employer-sponsored plans...

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