Saturday, October 20, 2012

Preparing For PPACA Pt. 2

If you think the PPACA doesn’t affect your business, because you aren’t in the health industry, it’s time to think again. Nearly every business, in nearly every industry, will fall under the jurisdiction of the PPACA in one way or another. Fortunately, it is not overly difficult to prepare for.

For most businesses, the PPACA will really only come into effect when dealing with human resources.

According to the Centers For Medicare and Medicaid Services, Office of the Actuary, healthcare costs now account for over 18 percent of the entire U.S. economy, and are expected to account for 20 percent by 2015. Therefore, it’s not surprising that Health Care Reform has dominated the employer-sponsored employee benefit plan landscape and will continue to have strategic and administrative impact for years to come — especially in the area of HR compliance.

This report, from ADP Research Institute, explores the complexities of HR Compliance in the PPACA. Below, we have summed up some of the major talking points from the report. For more detail, you can read all of ADP’s findings here.

Employee Benefits will Lose Flexibility

“Health Care Reform will require that you re-think employee benefits plan design due to both coverage mandates and the nondeductible excise tax on high-cost healthcare coverage,” begins ADP. “Although it seems like a long way off, beginning in 2018 healthcare benefit costs that exceed $10,200 for individual coverage or $27,500 for family coverage will be accessed an excise tax of 40 percent on the amount that exceeds this level.”

What does all that mean? Most employers will have no choice but to limit, or cut, healthcare options for their employees. Employer-sponsored plans will need to change from a model of options and flexibility, to one of control and consistency.

Public and Private Exchanges to Take Precedence

Three types of exchanges will become important to you as they come into effect by 2014. Again, ADP explains:

Limited Exchanges, which most employers offer today, are traditional employer-sponsored plans generally limited to three to six healthcare plan choices. Private Exchanges offer a variety of plan choices, aggregated by a provider or an outsourcer with employer input as to which ones are offered, and enable you to rapidly embrace a Defined Contribution strategy utilizing a qualified funding vehicle. Public Exchanges, required under Health Care Reform and offered at the state and federal levels, will vary by jurisdiction in terms of coverage, quality and participant experience.

 We'll continue next week, with a few more insights from ADP.


Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at

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