As Employers look ahead to 2011 plan years, they're raising questions to understand the affect health-care reform will have on current and future employee benefits plans. What changes, if any, apply to our group plan? Do I have to may all changes now? Is our plan Grandfathered; if so, does that mean I can disregard the September 23, 2010 changes?
To answer the first question Patient Protection and Affordable Care Act (PPACA) applies to 'group health plans'. But that does not mean 'every' group health plan. PPACA applies to:
Major Medical plans, Mini-Med plans, Executive Medical Expense Reimbursement Plans, Government Medical Plans, and some Health Flexible Spending Arrangements.
Changes that become effective September 23, 2010 are as follows:
- Coverage of older children (Grandfathered plans prior to 2014 do not have to offer coverage to older children if child is eligible to enroll in an employer-sponsored plan).
- New Appeals Process / External Review (does not apply to Grandfathered plans).
- Any Available Primary Care Provider / Pediatrician (does not apply to Grandfathered plans).
- Coverage of Emergency Services (does not apply to Grandfathered plans).
- Access to Ob/GYN Care (does not apply to Grandfathered plans).
- Limits on Pre-existing Conditions Exclusions (under age 19).
- No Lifetime Limits on Essential Health Benefits.
- Restricted Annual Limits on Essential Health Benefits.
- No Rescission.
- Preventive Health Coverage (does not apply to Grandfathered plans).
that hire workers from targeted disadvantaged groups on or before Aug. 31, 2011. 
As COBRA Administrator's for our employer groups, we keep a watch on the every changing legislation that impacts their Employee Benefit Plans to ensure compliance. 
According to a white paper published by TriNet in 2009, one of the "Top 5 HR Compliance Concerns for Small Business" is Current Benefit Regulation and Law Not Being Followed. "Small businesses spend 80% more per employee on federal regulatory compliance than large companies." This is further supported by a "Heath Care Policy Cost Index: Ranking States According to Policies Affecting the Cost of Health Care" conducted by The Small Business & Entrepreneurship Council's (SBEC). Beyond premiums that are traditionally 18% higher, small business owners do not have the infrastructure to manage the multitude of federal and state regulatory requirements associated with Employee Benefits Administration. SBEC states that "Additional negative factors in the health care equation are government mandates and regulations... But each mandate comes with added costs." 
It's hard to open any form of media and not be swept up in the whirlwind surrounding "Health Care Reform". In atmosphere of uncertainty one thing is clear, health care reform is on the horizon. If you are a small business owner, you and your employees will be impacted. 
Lets talk about the cost of employment..Although I can't list everything because some things would be different due to number of employees and the state the employee is in. But, here are the obvious cost: Social Security, Medicare, FUTA and SUTA. Other payroll cost I view as 'Administration,' and those would be: Preparing your earning logs, calculating regular and OT, Tracking bonuses / holiday pay/ severance/ sick leave, I-9 compliance, W-4 records, issuing checks, payroll deposits, preparing quarterly/ annual reports, maintaining payroll records/ bookkeeping, W2/ year end reports. 
As a business owner it is increasingly more difficult and time consuming to manage the administrative end of your business. When you think of all the time you devote to human resource issues, employee benefits administration, workers' comp, risk/safey management and of course payroll administration, it's a wonder that you have any time left to run your business. 
With health costs skyrocketing and recession revenues contracting, certain employers have had no choice but to eliminate group health coverage all together. There are still options, however, for small employers to put together some sort of benefit package for their remaining employees. For one, group life still remains a bargain, so I recommend having a separate group life policy paid by the employer for all employees. $15k - $25k can ofter be had for less than $15 a month. Next, voluntary benefits are not suffering nearly the rate increases of health plans, so those things like FLEX, AFLAC, dental, vision, legal plans can still be offered without any additional cost to the employer. But what about medical coverage? For folks with a fairly healthy group of employees, a list bill option for individual health plans may be an option. With our PEO, Management 2000, we have an in-house insurance agency names RMIA Inc. This allows us to offer groups unable to afford group coverage through the PEO an option of offering payroll deducted individual plans. The only downside to this strategy is that employees with ongoing health concerns will not qualify for this coverage and will have to seek other options. In Indiana, we help guide those employees through the state pool process. It is actually illegal for employers to contribute toward these health plans when a group plan could be available, so it doesn't look so bad when the employer couldn't afford to do it anyway. If a client wishes to 
, introduced by the IRS back in the mid '80's, are a terrific benefit tool to help contain out of pocket medical and dependent care expenses. The advantage of utilizing this benefit over deducting these expenses on a personal tax return is that in most states, you save on five (5) different taxes. You reduce your Federal Income, State Income, Local Income, Social Security and Medicare taxes. As great as these two programs are for an employee and employer, it has a disturbing "catch" that invariably encourages smaller employers to limit or eliminate the amount of $$ that may be put aside each year. The problem provision allows whatever level an employee enrolls in to have access to the full amount on 1/1 of the calendar year. If they use the entire amount on 1/2, that is their prerogative and they may pay the employer back each pay period the rest of the calendar year. If that same employee quits or leaves the company on 1/3, there is no obligation for that employee to repay this money and there is no legal remedy for the employer to recoup this cash outlay from the employee. The only recourse is to hope other participants either quit with positive balances or they leave a balance under the "use it or lose it" rule at the end of the calendar year. For small employers, this just does not happen. As a result, this benefit was often only available to employees of large companies that could spread the risk. Enter the PEO. Professional Employer Organizations allow many small employers to assemble under one organization for benefits purposes. This allows the inherent risk described earlier to be spread out over a much larger group of participants. Now, when a employee who has maxed out his claim leaves a small 5 man group, the Benefits Administration Team of the PEO takes on the risk of recouping the lost money through the other many small employers participating in the FLEX plan. In addition, this reduction in risk allows the PEO to offer higher annual limits employees may set aside. At Management 2000, we allow individuals to set aside up to $5,000 for medical and/or dependent care expenses in a calendar year. Ultimately, it is the PEO who assumes all the risk for this plan. The employee and employer participants in the PEO get all the benefits of the FLEX plans with none of this risk described above. This is just another example of the Human Resource Administration advantage that a PEO can offer small to medium sized companies. 
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