STARKVILLE, Miss.--When furniture industry and other manufacturing employers gathered recently during a Mississippi State University summit to discuss current challenges and opportunities facing the state business climate, the coming implications of the Affordable Care Act were among the hot topics on the table.
A panel discussion included Mike Chaney, Commissioner of Insurance for the State of Mississippi; Rusty Berryhill, president of Kevin Charles Furniture; Jim Taylor, corporate vice president for compensation and benefits with Huntington-Ingalls Industries; and Pepper Crutcher, partner with Balch and Bingham LLP.
Crutcher said that for many who may have hoped the Affordable Care Act would not be implemented, denial is the first stage of the grieving process; however, Chaney and others agreed that whether employers embrace the act or not, its reality is a fact of life. Employers of 50 or more full-time employees (including the aggregated hours of part-time employees) must pay certain non-deductible taxes if they fail to offer to all full-time employees and their dependents affordable, minimum essential coverage that provides minimum actuarial value, beginning Jan. 1, 2014.
Berryhill, whose New Albany-based company employs 65 people with only three office personnel, said the act seems like a moving target. He is concerned about additional costs in insurance premiums and ensuring compliance with mandates that are slated to go into effect in coming years.
Taylor said millions of employers are going to have the same challenge in implementing compliance into their benefits and compensation packages. While Crutcher alluded to an old blues tune by Mose Allison about the mentality of many employers regarding the legislation as "I don't worry 'bout a thing, 'cause nothing's gonna be alright," Taylor said the act instead reminds him of a Led Zeppelin song, "Dazed and Confused."
The panel led a candid dialogue about common questions facing the state's manufacturers and other business leaders, and speakers shed light on coming implementation requirements.
Crutcher, an employment lawyer who said he has spent about 1,000 hours studying the act in order to gain the best understanding of implications for his clients, said the most important point he would stress to employers now is to make their "Plan B" for coverage before it is too late.
Most provisions of the act go into effect Jan. 1, 2014. Crutcher explained that many insurance policies renew late in the year. He said if employers wait until their renewal date to see if their new terms are acceptable, they may not have enough time to research other alternatives.
"Don't wait to determine 'Plan B' if you've got a late 2013 insurance renewal. Come up with a plan just in case the terms of that renewal are not acceptable," Crutcher said. He explained that most of the act's costliest provisions for employers go into effect at the beginning of 2014, although additional terms stretch as far as 2019.
Crutcher explained that President Barack Obama promised that if people have coverage they like, they may keep it. Therefore, the act allows for grandfathered status on insurance coverage that an employer offered on March 23, 2010 and has remained substantially unchanged since then. Grandfathered status allows employers not to comply with most of the new mandates, although they do have to comply with some of them, Crutcher said. He warned that employers who make changes to policies could lose their grandfathered status, so they should approach any revisions cautiously.
He said he knows employers who are receiving proposals to make little changes to save costs, without it being explained to them that making those changes might forfeit grandfathered status.
"If the little change that is offered to them to save costs ends up costing them their grandfathered status, their costs could actually go up. Be careful--study whether that would affect grandfathered status before you make the change," he said.
While Mississippi is one of the least unionized states in the nation, Crutcher said employers of union-represented workers must make changes to their insurance in compliance with the National Labor Relations Act. "In most cases, that means you have to negotiate changes with the union," he said.
Panelists agreed that the Affordable Care Act has many implications for employers in Mississippi and around the nation. In seeking assistance in understanding how the new mandates will affect an individual business, Crutcher recommended that employers find advisors who have invested in studying the act extensively, as it is a complex law with financial implications for most businesses.
For more information about Mississippi State University, see www.msstate.edu.