Health-care reform has followed a tortuous path so far, with various political factions coming together and then moving apart like glass beads in a kaleidoscope. At press time, at least six different plans were up for debate, including one directly from President Barack Obama and one from long-time reform advocate Sen. Max Baucus (D–Mont.). While the plans follow broadly similar themes, their various nuances, such as a cap on the value of plans (contained in both the Baucus and Obama proposals) or a broadening of Medicare-based payments, could, if passed, have major impacts on employers.
"The question is, what are the indirect mandates being placed on employers?" says Kathryn Bakich, national health compliance practice leader for The Segal Co., a human-resources consulting firm. The proposed caps on benefits ostensibly affect insurers, levying on them a 35% tax for family plans valued above $21,000, for example. Since the insurers would likely pass those costs on to employers, though, the measure would penalize companies that can't reduce their employees' health benefits for contractual or competitive reasons, and would likely raise administrative costs by requiring all employers to conduct regular actuarial valuations of their health-care plans.
Not surprisingly, the impact of the hotly debated "public option," which would provide insurance to those who can't afford private plans, is also a potential issue for companies. At the moment, some of the public-option proposals hinge on government funding for services, with payments based on Medicare rates. Baucus's bill also seeks to expand eligibility for Medicare and Medicaid. Any expansion, though, could also raise health-care bills for employer-sponsored plans, since health-care providers generally charge the private sector higher fees to make up the gap between what they receive from those programs and what their services actually cost. "Anything is preferable to a new government system that's based on Medicare rates," says Marisa L. Milton, the HR Policy Association's vice president of health-care policy and government relations.
Lamenting such items, the Chamber of Commerce recently sent a letter to Congress with some 3,000 signatures threatening that "employers will not be able to continue offering their current plans" if changes are not made.
On the bright side, measures that make individuals responsible for getting health care rather than making employers responsible for providing it, and that correspondingly make health-care coverage more affordable to individuals, could potentially lift some of the burden on business. Obama's proposals to disallow insurance companies from denying coverage based on preexisting conditions "would create new, viable opportunities for people to get coverage outside employers' plans," says Milton.
Many CFOs, however, see the law of unintended consequences hampering whatever version of reform emerges. Andy Stefo, CFO of Harrison Medical Center in Seattle, says that he would try to shift his 2,400 employees onto a public plan if it were cheaper than providing insurance, and he expects others to follow suit. That means "we will end up almost by default in a national health plan, which I don't think is a good idea."
How Companies Are Preparing for H1N1
Many companies are formally preparing for the impact of swine flu, or H1N1, but government organizations seem to be ahead of the game. According to the Pandemic Prevention Council, 56% of private-sector companies report including H1N1 flu in their business-continuity plans, as compared with 71% of public-sector organizations. Nearly identical figures resulted when both groups were asked whether they have a cross-functional team leading their H1N1 preparation efforts: 58% of private-sector companies say they do, compared with 71% of public-sector organizations.
As for how companies and government organizations are preparing, key steps include cross-training employees, creating telecommuting policies, and revising sick-leave allowances.