Under ObamaCare, the year 2014 will be pivitol. All citizens (except a select few) will be required to purchase health insurance or face punishment. However, like mandatory auto insurance in Texas, many will just ignore the law and spend their money on more useful things. After all, the IRS cannot enforce the individual tax under PPACA.
Employers with 50 or more employees though, cannot ignore or dodge ObamaCare. They are going to pay for something, either in benefits or in punishment taxes, or a combination of both. IRS enforcement will be stringent and aggressive.
So where is the relief for employers with 50 or more employees who will be facing stiff increases in health care costs? What can an employer do to minimize costs and stay off the radar screen from federal enforcers?
There are several strategies to be employed. (1). Directed health care – employer steerage of medical care through carefully selected and directly contracted providers (2). Charge employees the maximum 9.5% of gross income as allowed by PPACA towards the cost of group health insurance (3). build a benefit plan that provides the minumum 60% actuarial benefit value (4). pay hospitals and other health care facilities their cost as reported to CMS plus a margin (profit) or Medicare rates, whichever is greater.
The unintended diamond in PPACA is that ObamaCare does not dictate that all providers must be covered nor does ObamaCare dictate how much a provider must be paid. To pay a hospital 100% of Medicare, for example, is less than paying typical managed care rates. Hospital executives are sucking eggs these days.
It is our opinion that implementing these four strategies will reduce an employers health care costs by as much as 60%.
Cost Plus Health Insurance will gain rapid market acceptance in the next 18 months. We expect to see hybrids tied to high deductible plans and cash savings accounts. Those with the foresight to recognize and seize opportunities in this cottage industry will join the ranks of a new class of rich people, much to the pleasure of Democrats seeking additional revenue sources.
Interesting stuff Bill! The law of unintended consequences. But what about us individual policy holders? Any opportunities there?