Administrative Challenges Employers Can Expect with Current Health Exchanges - Research Paper Example

Administrative Challenges Employers can expect with Current Health Exchanges Table of Contents Introduction 3 Cost Analysis 3 King v. Burwell, 2014 Lawsuit 4 Analysis of the Affordable Care Act (ACA) 5 Taxation Issues 5 Change in Authority 6 Delaying the mandate of Employer 7 Conclusion 7 References 8 Administrative Challenges Employers can expect with Current Health Exchanges Introduction Health exchanges in the United States are online marketplaces for health insurance. Each state offers a health exchange marketplace where residents of the state can obtain health insurance cover from competing health care facilities (HealthCare.gov, 2015). The health exchange marketplace allows shoppers to use a price calculator to determine whether they qualify for cost assistance subsidies and compare various qualified health plans that can suit their health needs and those of their families (HealthCare.gov, 2015). This plan enables insurers to comply with consumer protection laws and apply cost-efficient mechanisms. Heath exchanges are significantly important despite the cost and implementation challenges. Cost analysis Despite the positive contributions of the health exchange, employers face administrative challenges including training needs for employees, cost control challenges, compliance complexity and procedural difficulties. Employers need to train their employees on how to use the health exchange marketplace to suit the health insurance needs of their families, including how to use the price calculator to determine the amount of subsidies (HealthCare.gov, 2015). Employers also expect cost control challenges because the healthcare exchange will require them to provide medical benefits and attempt to reduce the cost burden associated with the current health exchange (Kingsdale & Bertko, 2015).Complying with the health exchange is also complex for employers because they need to monitor their health insurance plan to ensure that they achieve compliance with minimum standards of the health exchange (Pauly and Herring, 2007). The procedure for obtaining coverage for several employees through the health exchange marketplace is also challenging because it takes time and may be costly. Employers can, therefore, expect several challenges with the current health exchange including training needs for employees, cost control challenges, compliance complexity, and procedural difficulties. These challenges are experienced because the health exchange brings new methods of complying with insurance requirements for employees. The implementation of the Affordable Care Act continues to burden the administration of employees’ processes for a greater part of employers. In fact, the likelihood of the Supreme Court to uphold a ruling by a lower court opposing the legitimacy of the federal marketplaces is taking the place of state managed. According to Sally Doubet King and James McEllgot, who have a partnership at McGuire Woods LLP, there are various challenges in the administration of the wellness program without violating some Acts. For instance, the alarming 40 % Cadillac tax which is set to be applicable in 2018 as well as the various challenges in the administration of the program with no infringement of the American with Disabilities Act have insightful consequences on how different employers will meet these law requirements. These concerns are in addition to the various composite measures that are covered that employers are trying to comprehend and implement. This is meant to uphold the 2015 main implementation of the law and to stay free from penalties. King v. Burwell, 2014 Law suit According to McElligot, (King v. Burwell, 2014), implementation of health exchanges may impact employers in over 37 states that lack their health exchange. In relation to implementation, it is not clear on whether the various state exchanges that are facilitated by the federal government have approval from the Treasury regulations authority in the provision of tax-free subsidies to very individual who purchased health insurance through marketplace. Therefore, the court is expected to determine the authenticity of the action to ensure the regulations were adequately enough to the law irrespective of the fact that there was no clarity. Essentially, there was no clarity that the federal exchanges could be capable of acting as a state exchange regarding the tax-free subsidies. Overturning the regulation, it would mean that employers in all the 37 states will not be an issue to the imposition of penalties under the ACA due to their failure of providing health insurance to full-time workers. Analysis of the Affordable Care Act (ACA) It is controversial for employers to adhere to the ACA (Affordable Care Act) requirements. ACA provides that employers should increase coverage to accommodate preventive care components and wellness components to their strategic plans. Efforts to promote each of these programs have run below the Americans with Disabilities Act. According to (King v. Burwell, 2014) the law states that employees are not supposed to be penalized for choosing not to take part in various wellness programs that are offered by the employers. The position of the EEOC suggest that, if the incentive to the employer to take part is adequate, such a program could be interpreted as penalizing those individuals that choose not to take part and thus be considered non-voluntary. Taxation Issues In 2008, insurance providers including employers who self-insure were subject to a 40 % tax on a cumulative cost of cover that exceeds $ 27,500 for families and $ 10200 for individuals. It is also worth noting that Cadillac tax is the surplus amount, and the various issues to the tax may vary depending on how a health plan is administered. For instance, under a plan that is sponsored by a health insurer, the insurer is required to pay the surplus tax. In most cases, the instead of paying, they pass this cost to employers (Fuchs, 2011). Nevertheless, various changes are being made to ensure that tax will not be paid in future regarding health plans. Currently, employers are adjusting deductibles and co-pays as well as including collective bargaining agreements to reopen the subject should tax be triggered by the plan. There may also be need of considering On-site clinics that may be used to reduce the overall cost of care. This could add to the evaluation cost for the excise tax. Change in Authority Implementations of the marketplace have been considered to cause a significant reduction to the mandate of employers. The marketplace requires individuals to yearly updates by reporting any changes in your household, income among others. Other changes involve adopting a child, having a baby, losing the coverage of each other, getting married among others. Additionally, if an individual report a change in income but fails to qualify for a special enrollment period, one can adjust the premium tax credit amount one takes in advance every month to make that individual savings are updated. To do all these regular updates employers incur additional human resources to carry out these administrative operations. Alternatively, they may be required to compromise the performance of the organization by delegating some resources to these marketplace activities. The resources used could have if not been used for other productive operations in the organization (Gruber, 2011) Additionally, employers may be taking a risk of using the unproven system for those that are involved in the renewing coverage, as well as, tax hits that can sting million of the American citizens. Taxation issues are the outcomes of the complications that arise from income taxes and health care law. Since marketplace provides taxpayer-subsidized individual coverage to people who may not be having jobs, cooperation will be very paramount .HealthCare.gov is expected to serve 37 states while the rest of the states run their markets (HealthCare.gov, 2015). Employers expect to raise the budget with the current health exchanges. To ensure that employees are adequately prepared with the required knowledge regarding the various taxation policies as well as the various legal requirements the government as well as employers is required to set a considerable budget to handle these operations. Delaying the mandate of Employer Implementation of the marketplaces may delay the mandate of the employer. Delaying of employer’s mandate is brought about by the fact that many employers may have been in the in the early stages of strategizing to cut back the hours of workers. Employers may the numbers of hours for their workers so that they can avoid offering insurance to those routinely considered part of the time. Additionally there has been evidence that the a good number of employers have been holding back on hiring so that they can avoid incurring more mandate cost by having a large number of employees (Fuchs, 2011). The system had a variety of complexities. First, it involved integrating the new technology with the existing technology systems. Since the system was new and unproven, it was incredibly challenging to conduct any activity with the ordinary skills that were possessed by employers, as well as the employees. Therefore, employees had to be trained on the various element involved in the marketplaces. Alternatively, they could hire experts to prepare them including the entire employee community of the organization. Conclusions In conclusion, beginning 2013 October, marketplaces opened to public countrywide. These marketplaces offered insurance coverage that commenced on 2014 January. Regardless of the various administrative challenges that are expected with the current Health Exchanges, Health exchanges have played a significant responsibility in ensuring that people with no health coverage easily identify and enroll in an arrangement that suits their needs best. Conversely, marketplaces employers face administrative challenges including training needs for employees, cost control challenges, compliance complexity, and procedural difficulties. Employers need to train employees about how to use the health exchange marketplace to suit the health insurance needs of their families, including how to use the price calculator to determine the amount of subsidies. In addition, marketplaces have significantly affected the administration of organizations. The imposition of new administrative, reporting, taxation plan, compliance, as well as plan design requirements has significantly affected operations of the different organization. Currently, health care expenditures account for around 18 percent of the entire United States economy. In 2015, the health care cost is expected to rise to around 20 percent. This analysis translates that individuals get less while they are paying more in relation to employee satisfaction and appreciation. The reason for this dissatisfaction is because a greater part of employers have failed to apply a similar strategic planning process so that they can benefit the administration as they have always done to another side of the business operations(HealthCare.gov, 2015). References Fuchs, R. V. (2011). Affordability of Health Insurance to Small Business: Implications of the Patient Protection and Affordable Care Act. Journal of Health Politics, Policy and Law, 539-546. Gruber, J. (2011). The Impacts Of The Affordable Care Act: How reasonable are the Projection. Journal of National Bureau of Research , 44-87. HealthCare.gov (2015). Changing, updating, or canceling your Marketplace plan. Accessed April 19 2015 from https://www.healthcare.gov/keep-or-change-plan/choices/. King v. Burwell, 14-114 (Supreme Court July 11, 2014). Kingsdale, J., & Bertko, J. (2015). Insurance Exchanges Under Health Reform: Six Design Issues For The States. journal of Health Affairs , 23-68. Pauly, M.V. Herring, B. (2007). Risk Pooling and Regulation: Policy and Reality in Today’s Individual Health Insurance Market. Health Affairs, 26 (3) Read More