“We are telling clients that we will inform you what we find out as we find it out,” said Clark, the president of Clark and Associates of Nevada Inc., a local insurance broker. “We don’t want to scare people with what we don’t know. … but we are telling people, don’t expect your premiums to go down.”
Letters and press releases from Anthem, Blue Cross, United Health Care and Aetna all confirm that business owners will be paying more to give their employees health insurance under the new bill, signed into law by President Barack Obama on March 23. According to conversations Clark said she has had with fellow brokers, premiums could go up as much as 15 percent in the first year.
Some employers could be exempt from some requirements due to the bill’s grandfathering clause. That grandfather clause, according to the National Association of Health Underwriters (NAHU), is only available to providers that add a new employee or if the plan had to be reworked because of a regularly scheduled collective bargaining agreement meeting. However, that same organization states that even if a plan is grandfathered in, some of the new provisions will still take effect.
According to a fact sheet from the association, some of the more immediate effects include:
Small businesses are eligible for the small-business tax credit. Small employers will receive a maximum credit, based on the number of employees, up to 50 percent of premiums for up to two years if the company contributes at least 50 percent of the total premium cost. Small businesses are defined as those that have fewer than 25 full-time equivalent employees and pay average annual wages less than $50,000.
Within 90 days, those with pre-existing conditions will be eligible for a temporary high-risk pool if they cannot qualify for coverage anywhere else. Employers are legally prohibited from sending employees to the new pool and could face fines if they do.
All group and individual plans have to cover dependents up to age 26. Dependents can be married and will also be eligible for the group income tax exclusion. This law applies to all coverage, whether it was grandfathered into the new law or not. However, these grandfathered group plans will only have to cover dependents who do not have another source of insurance; this provision ends in 2014.
All plans will have to cover pre-existing conditions for those age 19 and under. However, grandfathered status applies for group health plans.
A federal grant program for small employers providing wellness programs to their employees will take effect.
Also part of the bill, starting in July, those going to a tanning salon will pay 10 percent more. To help cover costs of the bill, the legislation imposes a 10 percent tax on indoor tanning services, reportedly because of the health risks.
“Trying to tackle this (new legislation) by yourself is virtually impossible,” Clark said. “Stay close to your tax advisers and benefits advisers. That’s why people like us exist.”