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February 1, 2013

What's in the Future for Health Care?

~ written by Charlene Bigelow, Client Advocate, Human Capital Practice, Willis of Ohio, Inc.

Even as we enter 2013, the future of Health Care Reform remains unclear. What happens in States such as Ohio where the Governor has already stated he will not establish a state exchange? Does the federal government step in and if so, how will it be funded?

While the future is “clear as mud” one thing is certain, employers must have a short- and long-term strategy to managing escalating health care costs; managing costs year to year will no longer suffice. Why is this important? For a healthy workforce, costs continue to rise 7 – 10% each year. For a sick or aging workforce, increases can be much higher.

Beginning in 2014, employers need to be prepared to offer full-time equivalent employees a minimum level of benefit coverage or pay a tax (e.g. Pay or Play). While some employers may consider the tax a means to exit the health care market, consideration should be given to what the $2,000 tax really means to their organization. And $2,000 quickly becomes $5,000 when you consider the tax savings (both employer and employee) and the potential increase in salary employees will expect following the loss of benefits.

Do you know – how many full-time equivalents you have in your workforce? The maximum annual penalty would be for not offering qualified benefits? The income threshold for triggering eligibility in state exchange within your workforce? The average annual increase you can receive now through 2018 and stay $1 below the excise tax threshold?

These are just some of the questions our Health Care Reform Calculator will answer. If you are not working with an advisor who is helping you plan for the future, you should contact me immediately. I approach health care strategically, eliminate surprises and manage towards the future. I welcome the opportunity to discuss this and many other ideas with you at your convenience. Call 614/326.4907 or email char.bigelow@willis.com.

The information in this article is not intended as legal or tax advice and has been prepared solely for informational purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.