The Unintended Consequences of ACA – From the HR Trenches

flatlineSo before my right wing and left wing friends think I’ve broken my oath to never publicize my political affiliations, let me make sure that you understand right here that this is not a political piece. Let me repeat, you’re not about to read a politically affirming written piece that you can turn into your own political view of the world.

Nope, this one is written by an HR pro, who is grappling with understanding how all this crap is supposed to work for our small business clients. And, I don’t even pretend to be an expert in the subject of ACA, I’m just here trying to wade through the morass that we’re left with. Trying to make sure that our biggest assets, our people, are covered in the event that they experience illness – a noble cause methinks.

Right now, I’m not sure government understands the whole mess in its currently convoluted form, and while the carriers are trying to figure it out, they are also covering their fiscal derrieres, because it’s now morphed into a free-enterprise yet socialized system which has caused previously expensive rates to now sky-rocket into bankruptcy inducing territory.

I was one that did believe that there was a gap in the uninsured in this country. I was born and raised in England, I know far too well that socialized medicine isn’t really the answer unless you plan to die on the waiting list for chemo treatment. Why is it, if socialized medicine is so awesome, that people in England are buying subsidy insurance so that they can get care when they need it? Right? I digress.

I also know that my feeling all along has been that those who were paying to cover their employees with health insurance, were subsidizing (in some way or another) the care of the less fortunate. I mean, explain to me why healthcare is so freaking expensive? It has to be… no? Not trying to over-simplify, but for every kid who’s strapped to a gurney in an emergency room and given 5 stitches for $1,500 – surely one pays that sum (or their insurance company does) and the remainder covers the next four kids who come in who are uninsured for the same 5 stitches?

But, here at hr-haven we’re really proud to have clients that have always done the right thing, even when they weren’t forced to. I mean, they have always cared enough about the health and welfare of their employees to do the right thing and provide their employees and families with health coverage, even when they probably couldn’t afford it. We’re not talking about these leviathan organizations who are touting that they’re going to never have a full time employee ever again to avoid having to comply (even though that isn’t a

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fix). We’re talking about the backbone of this country, of companies with 10, 20, 50, 75 employees who are making mortgage payments and paying for soccer and dance lessons for the vast majority of the population of this Country – and wouldn’t DREAM of NOT PROVIDING HEALTH COVERAGE.

Go back three or four years, I recall having conversations with business owner clients about their 12% to 15% increases based on their “experience” rating which nobody at the carrier could substantiate, while watching their hands wring and the color drain from their faces. But they still kept providing it – it was the right thing to do.

Fast forward to today. From what I’ve seen of renewal numbers this year, we’re at 28% increases on the low end, and 55% increases on the high end, and this is a couple of years into this damn debacle aft

er surviving the same type of increases just last year. And, invariably, these increases are for plans with lesser benefits. Really? We’ve gone from an environment where family coverage was one price, to ACA plans where every single family member has a price tag – I’ve seen some family premiums for employees double if they have three or four kids in the last couple of years. Speaking from the trenches, it’s wicked disheartening to have to have conversations with business owners who feel absolutely compelled to take care of their employees – as they always have I might add – who now are in a position where their businesses could well be at risk if they continue to do so. Not cool.

Let me give you a few live examples:

  1. Client gets a 55% increase in premium, they have to switch plans to one that offers significantly less benefits just so that they can afford the premiums which are still higher. The reason they are in the pit with the deductibles and out of pockets is that they couldn’t afford to keep it up last year, let alone this one. Their rates are three times more than they were 5 years ago, and the benefits are substantially less. Everyone loses.
  2. Restauranteur clients are truly in a mess. The penalties for not offering are stiff for this industry, but if they do offer benefits, their restaurant-minimum-wage staff still can’t afford it, but now they won’t qualify for any subsidy because they have coverage available from their employer. Weren’t we supposed to be helping these guys get coverage?
  3. And the one that really broke my heart this week is a husband and wife client. The husband owns one business, the wife another. Jointly, and the law says that because they are husband and wife, the businesses have to be combined for purposes of the ACA, they are over the threshold for many of the reporting and penalty pieces of ACA but wouldn’t be if their businesses were viewed as stand alone. This aweso
    me couple is seriously talking about divorcing for the sake of the health of their businesses – divorcing.

Look, call me a softie, but I do believe that care should be available to everyone. I’m not taking a right wing nor a left wing stance, so if you’re going to comment on this post, KEEP YOUR POLITICS TO YOURSELF. But I am witnessing, first-hand, what the inattention of our lawmakers is doing to screw up the small businesses of this nation. As

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with many acts, laws, regulations or “recommendations” made over the last few years, it would be great if our

warring politicians would step back for a minute and rather than talking to lobbyists, or protecting their derriere from harm in the next election, talk to people who are in the trenches who actually have to figure out how to help people navigate through this mess to see where the shortcomings of their actions lie.

Enough said – if you’re under 20% this year without having to seriously mess with the level of benefits you provide, you have my heartfelt congratulations and I applaud the efforts of your unsung hero broker. For everyone else, hold on, because I don’t see any of this ending well. Thank you for listening.