Health Reform Will Cost Me How Much?

The Health Care Reform  and Reconciliations Bill signed into law by President Obama will vastly change  how care is delivered,  purchased, consumed and taxed over a lifecyle that begins for plans with  anniversary dates as early as October 1, 2010 through  2018.   While the media has been quick to report the 100 million dollar plus  charges of company's like AT&T and Catepillar, these reflect hits to earnings as a result of   a loss of a tax benefit for covering seniors under their drug plans instead of through Medicare Part D.   For most employers who do not offer coverage for inactive employees, the question is often how and when will this bill cost my company. There will be three primary costs a company can expect to pay under this bill:

1. Benefit Adjustments - As the government will soon require bans on lifetime maximums and coverage for dependents up to age 26 (regardless of student status), there will be underwriting adjustments that will impact health premiums.   These adjustments will impact plans with anniversaries of October 1, 2010 or later.

2. Communication Expenses - With the complexity of this bill, expect to invest more in your corporate communications or rely more heavily on firms like mine.   In 2014, certain employees will have the option of electing coverage under the state exchanges.   Let's all look forward to  explaining family income limits and federal poverty levels,  state exchanges  and medicaid choices in an open enrollment meeting that will boggle the mind.

3. Compliance & Reporting Costs - These charges will be the actuarial and filing expenses your company must now pay to adhere to the new federal regulations.   In the same way that Sarbanes Oxley made it more expensive to be a public company, there will be  federal reporting and disclosure costs for all employers.

Click here for a year by year report of the major changes the reform will bring.