The Affordable Care Act is confusing. Three years after it became law, polls show many Americans still don't know what it means for them.
So when the Obama Administration announced last week it would delay implementation of a key provision of the law -- the requirement that large businesses provide coverage to workers or pay a penalty -- that confusion only grew. Some opponents of the law held up the delay as evidence of a fatally flawed policy, but Capital Region insurance experts say the delay will actually help unravel any remaining confusion.
"There was a lot to get done in a short period of time," said CDPHP spokeswoman Ali Skinner. "Those deadlines were creeping up on everybody very quickly, so our perspective is this gives everybody an opportunity to really get prepared at a slower pace and learn this inside and out."
The employer mandate , commonly referred to as "play or pay," required employers with more than 50 employees to provide affordable coverage or pay a minimum $2,000 penalty per worker.
Originally, it was to go into effect Jan. 1, 2014. The idea was to give large employers more time to comply with cumbersome regulations, like determining who is considered full-time, what kind of benefits they should get and what requirements an employer needed to fill.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," the Treasury Department said in a July 2 statement. "We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so."
In the Capital Region, these regulations were a race against the clock for some midsized businesses. Most large businesses tend to already offer coverage; it's the businesses that hover around the 50-employee threshold that felt the most heat.
"Any of these businesses hovering between 47 and 55 employees were terrified," said Scott Sylvester, an NBT Insurance Agency account executive who will discuss health care reform at 8 a.m. today with local business owners at the Fulton Montgomery Regional Chamber of Commerce building in Gloversville.
The main points of confusion with the employer mandate were always the same, he said: reconfiguring insurance plans so they fall below the 9.5 percent contribution cap and calculating full-time and full-time-equivalent employees.
Sylvester helps with both. The employer mandate states an employee's contribution to their health insurance premium should be no more than 9.5 percent of their gross income. Sylvester would help noncompliant businesses determine whether they should change their plan to one that increases deductibles and co-pays or simply pay their employees higher wages to bring the percentage down.
Employers were also confused over whether they fell in the 50 or more employees category. The ACA recommended employers look back at the last six or 12 months to accurately determine whether they met the large business threshold. Since so many factors go into calculating this number -- full-time and part-time status, total part-time hours worked, seasonal employees and more -- health care experts recommend using an online calculator or consulting an expert for help. The one-year delay gives employers more time to do this.
"I met with a group last year, just before their renewal, that was so overwhelmed they thought it would be cheaper to go in the other direction and not offer coverage and pay the penalty," said Sylvester.
In the last two years, Chad Granger found himself consulting with Capital Region employers in the retail, restaurant and contracting industries. As assistant vice president of employee benefits at The Heritage Group, a Latham company that provides insurance services, solutions and advice, he noticed the 2014 deadline put the most pressure on seasonal businesses and businesses that tend to renew their plans in the first half of the year.
"Those who renewed earlier in the year, everything was more urgent," said Granger. "There was pressure to be in compliance in the first quarter of the year, and usually we start the renewal process 60 days ahead of time, but with all the changes, we were coming in another 30 days in advance. The pressure's not there to get it done now, at least not in the time frame we had anticipated."
Ultimately, experts aren't sure the delay will leave many people without insurance. Some health analysts have speculated employers will drop coverage and dump employees into state health exchanges, while others predict employers will take a wait-and-see approach to the delay.
The individual mandate is still in place, and state health exchanges will still begin enrollment Oct. 1. The Obama Administration still strongly encouraged employers to maintain or expand access to health coverage and to voluntary report this information in 2014. Whether that happens remains to be seen.
"Some people could perceive this as the administration stuttering a bit on moving forward," said Granger. "So while there were good reasons laid out for the delay, whenever you get close to the 11th hour, people will have those perceptions. I think, just be thankful that there is more time to figure this out and continue to address the problem."
Reach Gazette reporter Bethany Bump at 395-3107 or firstname.lastname@example.org.