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Panelists caution on ACA reporting needs

Rochester Business Journal
October 9, 2015

Panelists had this message for attendees of the Rochester Business Journal’s Sept. 29 Health Care Reform Power Breakfast: Watch out!

For employers who expected the Patient Protection and Affordable Care Act to succumb to court challenges or to be scrubbed by Congress, and neglected this year to compile ACA-related documentation the Internal Revenue Service will want, it is probably too late to avoid penalties, which could be steep, panelist Karlee Bolanos warned.

“The idea that the Affordable Care Act will go away turns out not to be true,” said panelist Christopher Booth, president and CEO of Excellus BlueCross BlueShield. “It’s here to stay at least for a significant period of time.”

Reporting requirements are complicated, said Bolanos, a member of Harris Beach PLLC in the law firm’s Municipalities and Local Agencies team and a consultant with Harris Beach’s HB Solutions LLC consulting arm.

One example: Owners of unrelated businesses of with fewer than 50 employees each might think their firms fall squarely within the small businesses exempted from ACA penalties, but might find that for ACA purposes the companies are considered a single enterprise.

Figuring out which employees count as full-time and which can be counted as part-time is also not simple, Bolanos said.

Calculations to determine whether a business meets the ACA requirement to offer affordable health plans to a given percentage of eligible workers also are far from easy.

Under the IRS’ Individual Shared Responsibility Provision, employers must show they have offered workers minimum essential coverage for each month in the past year.

The IRS allows two methods to document this: month-by-month or lookback. Both require complicated calculations that can be daunting, but employers would find the lookback method to be “a gift from the IRS,” Bolanos said.

The IRS calculates current year ACA taxes based on the previous year’s data, she noted.

Employers who are not required to comply with ACA mandates until next year should be gathering data. Those who do not could be hit with penalties in 2016, Bolanos warned. 

Booth and panelist Lev Ginsburg, the Business Council of New York State Inc.’s director of government affairs, had few kind words for the ACA.

The act “has been an interesting success story in terms of insuring the uninsured. But it did absolutely nothing to make care more affordable,” Booth said. 

“We need to look at mandates and evaluate them better,” Ginsburg said.

New taxes levied to help finance the ACA and “thousands of pages of (new) regulations” are burdensome to insurers as well as other business owners, Booth said.

And while insurers are being hit with new taxes, he added, state regulators are cutting down health insurers’ rate requests, driving them down to less than the cost of doing business.

Booth blamed steep increases in prescription drug prices for much of the rise in health care costs.

Demographic shifts are also helping to drive up costs, he said; an aging and increasingly obese population makes it more costly to care for chronic illnesses and more sufferers of multiple chronic conditions.

Is cost control possible?
Yes, Booth and Ginsburg said. A local initiative is underway that could help: shared savings contracts Excellus has inked with the University of Rochester Medical Center and Rochester Regional Health.

Such contracts offer rewards to providers that meet certain quality goals and aim to make payments to hospitals and doctors entirely dependent on the quality of care they deliver.

Excellus’ contracts’ terms closely mirror payment plans being developed and implemented by Medicare nationally and by New York’s Medicaid reform program.

High-deductible insurance is touted by some as a cost-control measure.

Under a theory known in health care circles as skin in the game, high-deductible proponents believe consumers who have to foot more of the bill will make more informed decisions and sign up for fewer unneeded high-cost procedures.

But as such plans have proliferated, providers have found that faced with what they fear will be steep medical bill patients with high-deductible plans have skipped needed care or skipped paying bills for care.

“My personal preference is that it’s good to have skin in the game. But many people with such plans don’t have good information and make poor decisions,” Booth said.

He said reform as it stands promotes “a race to the bottom. Premiums don’t cover costs. Provider reimbursements go down. It starts to look more like Medicaid than commercial insurance. Many doctors don’t want to take Medicaid.”

If not better managed, reform could push us into a two-tier health care system, Booth warned.

10/9/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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