MDNews - Cleveland-Akron-Canton

++++++++++++++++++++++++ + +++ +BuSINESS SECTION ���+++ ++++++++++++++++++++++++ The Double Edged Sword of Healthcare Reform By Ronald F. Pavlovich, CPA, CAPPM T Act of 2010, commonly referred to as Obamacare, threatens many healthcare organizations with a double edged sword. One edge of the sword is represented by the changing reimbursement structure that will certainly impact a healthcare organization���s revenue. The other edge of the sword threatens a healthcare organization with additional expenses as an employer. Beginning in 2014, the employer mandate becomes effective and requires employers to provide health insurance coverage to their employees or face a penalty. Certain employers that do offer health insurance to their employees may still be at risk of paying a penalty. Employers with 50 or more fulltime equivalent employees must offer qualified health insurance coverage to their employees. A full-time equivalent employee is defined as an employee who works 120 hours or more per month. Every 120 hours per month worked by part-time employees count as a FTE. Employers with fewer than 50 FTE employees have no requirement under the law. It remains unclear whether the employees of multiple entities with common ownership will be combined for the employer mandate. Clarification on combining employees currently rests in the hands of the IRS. HE ACCOUNTABLE CARE 38 | Cleveland/Akron/Canton MD News Employers that do not offer at least minimum qualified coverage will face a non-deductible penalty if one or more of their employees receive a federal subsidy to buy insurance on their own through an exchange. That penalty is $2,000 per employee in excess of 30 employees. For example, an employer with 65 employees would face a penalty of $70,000 (65-30 = 35, 35 x $2,000 = $70,000). To qualify for a federal insurance subsidy, employees must show that their insurance cost exceeds 9.5% of their household income, and that household income is below four times the federal poverty level ($88,200 for a family of four). The government will publish lists of subsidized families to aid employers in identifying those receiving federal aid, adding concerns of privacy. Empl oyers that offer insurance can still owe a penalty. All it takes is for just one employee to have federal subsidized coverage, perhaps waiving more expensive employer coverage. For organizations that do offer insurance, the penalty is the lesser of $2,000 for every employee (after exempting the first 30) or $3,000 for every employee receiving a subsidy. Employers are not only at risk of a penalty for not offering minimum qualified coverage. Employers sponsoring high cost health plans will pay an excise tax on ��� MDNEWS.COM ��� JANUARY-FEBRUARY 2013 excess cost. This tax, also known as the ���Cadillac Tax���, is effective beginning in 2018. The excise tax is 40% of the cost of coverage for health benefits above a pre-determined threshold set at $10,200 for self-only coverage and $27,500 for families. Thresholds for certain high-risk professions and retirees not eligible for Medicare benefits are higher by $1,650 for self-only coverage and $3,450 for family coverage. The practice of medicine is not considered a high-risk profession for the increased threshold. These additional taxes and penalties will force employers to evaluate the staffing levels and needs in addition to health insurance coverage costs and limits. Employers with 49 FTE employees could significantly increase their overhead cost just by adding one employee. Employers with 50 employees may be assessing the ability to reduce their staff by one or two employees. In either case, the disincentive to grow appears to be an unintended and disappointing reality of healthcare reform. Ron Pavlovich is a CPA and CAPPM (Certified Administrator in Physician Practice Management obtained from the American Academy of Medical Management) and a senior manager in the Medical Practice Management Group of CBIZ MHM, LLC, in Akron, Ohio. ���

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