Health care reform’s passage has food-industry employers wondering how the changes will affect their businesses. Though the food industry may be financially impacted by the reform, some experts say there are immediate steps that employers should take to eliminate potential fines.
In an online webinar hosted by People Report and Black Box Intelligence, Trey Darby, senior vice president at the insurance brokerage Lockton Inc., encouraged employers not to be overwhelmed by the reform. “The organizations that get moving today will have many more options than those that sit and wait,” Darby said on the webinar.
Darby suggested that before 2013, employers evaluate four areas of their health care coverage: summaries of benefits coverage (SBCs), wellness plans, W2s, and renewal strategies.
SBCs compare employees’ current policies to other available policies. They must be distributed to all eligible employees, enrolled or not enrolled, in order to avoid fees. Fees could be as drastic as $1,000 per enrollee, per plan. Employers should make sure SBCs are accurate and are translated to the predominant language of the county where the individual restaurant is based.
W2 forms must now report the employer’s share of health-care coverage and the amount that the employee pays. Employers should let their employees know how W2s will reflect these changes, Darby says.
Until now employers have been paying for 100 percent of wellness program costs. The reform will allow them to charge their employees premiums for these programs.
Darby says the right renewal strategy for most clients probably lies somewhere between “pay” or “play.” “Pay” scenarios allow employers to end their plans and usually bode well for lower-income employees, while higher-income employees generally will have to pay more than before, resulting in what Darby calls a potential “employment problem.”
In “play” strategies, the company provides coverage for all employees, generally resulting in higher expenses for lower-income employees. Darby describes the most cost-effective solution as one in which lower-paid employees go to an insurance exchange to get their coverage, and higher-paid employees keep their coverage through the employer.
In order to avoid additional fines, plans must offer qualifying coverage (at least 60 percent of an individual’s health-care costs) and affordable coverage (less than 9.5 percent of an employee’s W2) to full-time employees (30 hours a week or more) and their dependents, Darby says.
For those overwhelmed by the health-care reform, Darby recommends seeking consultation.
In an e-mail to QSR, he says, “This is where having a good team that understands your business model and can help you navigate and plan is critical. If your advisor is not advising you on the cost of complying or on the financial impact to your organization, find a new one—quickly.”
By Laurel Nakkas
