By Stephen Tweed
One of the hottest topics of discussion among private duty home care owners the first half of this year has been health care reform – the Accountable Care Act – and how it will affect the home care business. Our analysis shows that the law as written has the potential to have long term negative impact on many home care companies.
But the biggest issue right now is the uncertainty. Owners are frustrated and concerned because they don’t know how this law will affect their businesses and their personal lives.
Employer Mandate Postponed
Well, the law took another step in the process of unraveling this week when the Obama Administration announced on Tuesday it is putting off the implementation of the “employer mandate” until 2015. This provision of the law requires employers with more than 50 FTE employees to provide health insurance. This provision was scheduled to take effect on January 1, 2014, just six months from now.
While the administration has decided to delay the employer mandate, they did not extend the individual mandate, which means that each individual must purchase insurance by January 1, 2014 or pay a penalty. Most individuals will not feel the effects of this because when they don’t buy insurance, the penalty will be deducted from their income tax refund. Since the first year penalty is $95.00, it does not create an incentive to buy insurance for young, healthy individuals.
Insurers Drop Plans in California
The second piece of unraveling this week came when United Health Care announced it will stop selling individual insurance policies in California. This comes on the heels of Aetna which announced earlier that it would stop selling individual plans in California. That leaves only Anthem Blue Cross, Blue Shield of California, and Kaiser in the market to sell individual policies through the insurance exchange called “Covered California.”
CLASS ACT dropped earlier
The first sign of unraveling of the Accountable Care Act came last year when the Administration backed away from the CLASS ACT, the voluntary long term care insurance plan. Government actuaries determined that the CLASS ACT was not financially viable.
Bill to Amend 30 Hour Full Time Work Week
Back in April, Sen. Susan Collins (R-ME) has introduced a bill to “allow employees to work up to 39 hours per week without triggering penalties on the businesses that hire them,” while, in a hearing this week, Sen. Lamar Alexander (R-TN) said the Affordable Care Act’s definition of a full-time workweek at 30 hours or more per week is “providing a disincentive for full-time employment.” Senator Collins’ bill, the Forty Hours Is Full Time Act of 2013, (S. 701), follows the introduction of the Part-Time Worker Bill of Rights (H.R. 675) by Rep. Jan Schakowsky (D-IL) and bills in state legislatures that would amend the ACA to penalize employers who fail to provide health insurance to part-time employees, regardless of the number of hours worked.
What does all this mean for you, the owner or leader in the private duty home care business?
Well, it means you get a brief respite of a year to figure out how you are going to deal with the employer mandate. However, it leaves another year of uncertainty about how the health care reform law and regulation will affect our industry.
What should you do? Focus on growing the largest, most effective, most profitable business you can in the next 15 months. Firm up your relationships with referral sources, make sure your caregiver recruiting and selection system is in place, and store up some cash. If you do these three things, you will be in better shape than 80% of the industry to survive and succeed in spite of health care reform.
The second thing you should do is examine Senator Susan Collins’ bill. If it makes sense to you, encourage your state Senator to support this bill. If the full time work week is raised from 30 hours to 40 hours it will give you more flexibility in how you handle the employer mandate.
Stay tuned for more details as we continue to look out for you in understanding and responding to the changes in the Accountable Care Act.