Patient Protection and Affordable Care Act
Beginning in January 2014, the Patient Protection and Affordable Care Act (PPACA)—the health care reform law—will institute a penalty for employers that do not offer a “valuable and affordable” health plan to their employees. Impacted employers include organizations that have 50 or more full-time equivalent (FTE) employees. The fine will be $2,000 per FTE per year, with the first 30 employees excluded from the calculation.
Recent surveys conclude that a small percentage of employers are seriously considering disbanding their group plans—however, Rensselaer is committed to continuing to provide a comprehensive and affordable benefit plan for faculty, staff, and retirees.
“At this time, Rensselaer has no plan to scale back the health coverage offered, nor do we plan to cease offering health coverage.”
In light of this pending health-care reform law, the Division of Human Resources has been proactive in addressing the changing health care environment, and we started making the required changes in 2011. Some changes included covering children with pre-existing health conditions and dependents up to age 26, eliminating lifetime limits on coverage, and implementing preventive services for women with no copayments. To date, the Rensselaer medical plan well exceeds federal government standards for eligibility, spouse coverage, same-sex partners, affordability, single coverage, and minimum value.
Now, as I look forward to addressing the 2014 requirements, my concerns are focused on new fees that will be imposed on group health plans—especially the Transitional Reinsurance Fee that applies to grandfathered and non-grandfathered health plans, as well as to retiree health coverage (unless it is secondary to Medicare or qualifies for another exception). It is expected that this fee may cost Rensselaer an additional $63 for each employee and dependent covered under the plan. Additional issues that we will need to address include new reporting requirements that will be in effect at the end of 2014 to demonstrate our compliance with PPACA, and employee and retiree confusion about whether they should remain on the Rensselaer plan or seek coverage under the new Health Insurance Exchange.
We have found that the impact of PPACA on large organizations such as Rensselaer will be somewhat more limited than on smaller organizations. However, we will still have to grapple with cost increases and potential fees. Rensselaer is recognized locally and nationally for the depth and breadth of its compensation and benefits programs, which represent a significant portion of an employee’s total compensation.
Rest assured that at this time, Rensselaer has no plan to scale back the health coverage offered to employees and retirees, nor do we plan to cease offering health coverage, and pay the penalty to the government. It is our goal to continue to ensure that our compensation and benefits plans are competitive in order to retain and to attract the most productive faculty and staff.
Curtis Powell, SPHR
Vice President for Human Resources