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Broker: PPACA is distracting us from health

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Michael Grant wishes policymakers could come together to help employers and benefits advisors spend more time on getting Americans healthy, and less on the finer points of counting full-time equivalent employees.

Grant, the head of the employee benefits division at Crystal & Company, a large family-owned insurance broker based in New York, has lost 31 pounds to show he is serious about the firm’s wellness program. The firm has brought in Rocco DiSpirito, the celebrity chef who wrote The Negative Calorie Diet book, as an advisor on eating better. Grant has also been eating better.

Many, many more American workers have to eat better, exercise, take the time to go to their doctor’s for their checkups, and, in general, do what it takes to follow sound medical advice about conditions such as diabetes and high blood pressure, Grant said earlier this week in an interview in his office in Manhattan, just off of Wall Street.

“Claims are claims,” Grant said. “You have to figure out what to do to reduce the claims. We are at a critical time. It’s just spiraling out of control, from a cost perspective.”

See also: Joe Ellis: Middle market benefits supply looks fine

The Patient Protection and Affordable Care Act (PPACA) has expanded access to health coverage, and “that’s great,” Grant said. However, PPACA has not done much to expand the supply of medical professionals and that is something to worry about, according to Grant.

PPACA is pushing employers to think about counting employees for the PPACA shared responsibility employer mandate program, send 1095-C coverage notices to employees and 1094-C coverage summary notices to the Internal Revenue Services (IRS), and obsess about many other tasks that do nothing to improve people’s health, and that, Grant said, is a big worry.

Employers could cut benefits costs by cutting the amount of necessary care they cover, but both employers and employees will be better off if employers help employees cut the amount of care they need, he said.

Keep reading to learn more about what Grant said.


1. PPACA has not been a positive force for group health benefits administrative simplification.

When Congress developed PPACA, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Employee Retirement Income Security Act of 1974 (ERISA) and other benefits laws, one goal was to reduce U.S. health care costs by decreasing the huge percentage of spending that goes toward administration.

Whenever the U.S. Department of Health and Human Services (HHS) implements statutory provisions, it’s supposed to analyze the costs for employers, insurers and other affected parties, and it’s supposed to analyze the burden imposed by information collection efforts.

In the real world, Grant said, the administrative burdens imposed by implementing PPACA’s employer-focused requirements are enormous.

“Administratively, the burden of health care reform has fallen on the employer,” he said.

An employer has to count employees, pay penalties if it has failed to provide affordable coverage with a minimum value enough to cover the employees’ rights, and help the Internal Revenue Services (IRS) determine whether consumers who said they qualified for PPACA public exchange plan subsidies actually qualify for the subsidies.

Grant said that Crystal & Company serves employers with 50 or more employees all over the country. The amount of time and money devoted to PPACA may fall in the future, but, at this point, the typical Crystal benefits client is spending about 35 percent of its human resources and benefits resources on PPACA-related activities, he said.

Before PPACA rules took effect, top-level group plan compliance costs might have averaged about 1.5 to 5 percent of health benefits spending, he estimated. Now, he said, PPACA has added costs equal to about 1 percent to 3 percent of total health benefits spending.

At well-organized employers that planned ahead, PPACA may be increasing health benefits compliance administration costs about 20 percent, but it might be tripling costs at some employers that are rushing to try to handle the job themselves in-house, at the last minute, and the costs could be much higher for employers that end up paying fines, he said.

The payroll companies that explicitly offered to help with PPACA compliance have generally lived up to their commitments, but few of them are actively marketing those services now, because they had to struggle to get the job done, according to Grant.

“It was a lot more laborious than they thought,” he said.

See also: Shan Fowler: The Day of the 1095-Cs

Crystal & Company door

2. Regulators are coming.

For employers, another challenge is that state and federal agencies are taking an aggressive approach to benefits law compliance, Grant said. 

“It’s definitely up year over year,” he said. “They throw a great big net.”

The visitors look at everything from employee counting, to discrimination, to summary plan descriptions. If an employer seems to be trying to comply but violating some rules, “they’ll work with you,” Grant said. “They don’t like that. They like it to be all buttoned up.”

If an employer hasn’t actively taken steps to comply, possibly because it’s been involved with a merger, or a desperate struggle to survive, “they take out a pad of paper and start giving you penalties,” Grant said.

See also: Employers may be stickier

The Negative Calorie Diet book by Rocco DiSpirito

3. Vegetable broccoli is having a hard time competing with statutory broccoli.

Originally, critics of PPACA likened PPACA coverage mandates to legal requirements for people to buy broccoli.

At Crystal, Grant would like to be doing more to promote the consumption of healthy food, use of preventive services, and other wellness and condition management basics.

PPACA now requires all non-grandfathered plans to offer basic preventive services, including checkups, without imposing out-of-pocket costs on the patients. But Grant finds clients’ employees often struggle to get more than four hours of sleep per night, let alone go to checkups.

To make wellness happen, employers have to make wellness a priority, he said. He recommended three elements for a successful wellness program:

  1. A real commitment at the top.

  2. A commitment from line managers to give employees the time necessary to take care of their health.

  3. A massive amount of communication with employees.

Otherwise, “people don’t take that wellness exam seriously enough,” Grant said. “When they get sick, they’ll deal with it.”

By the time people “deal with it,” Grant said, “dealing with it” could mean paying for $125,000 in medical care for a stroke. 

See also: 

PPACA World 2017: Don Goldmann looks ahead

The Broccoli Case: Obama Administration, PPACA Opponents Ask Supreme Court to Rule

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