Businesses say health insurance is key to keeping top employees

ST. PETERSBURG — Tampa Electric's Brad Register is no cheerleader for the Affordable Care Act.

As the utility's benefits director, Register has had staffers sorting through the complicated regulations for nearly three years now. So far the law has meant a 2 percent increase to cover young adult dependents, the loss of at least $300,000 in tax exemptions and the prospect of a reinsurance fee of nearly $500,000 between 2014 and 2016.

But drop employees' health coverage and pay a penalty, as some businesses have threatened? That seems a recipe for losing highly skilled employees who'd take a job with benefits somewhere else, Register said.

"It becomes a competitive situation," he said Wednesday at a business-oriented panel attended by nearly 100 people called "The Health Care Reform Domino Effect."

The forum coincided with the release of new projections from the Congressional Budget Office: By 2022, 7 million people, nearly double earlier estimates, will no longer get health insurance from their employers. That's not because of the health care law, but because of the deal Congress struck to avoid the "fiscal cliff." It contains changes that mean less of a tax break for employers who offer health insurance.

Under the health care law, large employers — with more than 50 employees — must pay a penalty if they do not offer coverage, or if the insurance premiums exceed 9.5 percent of employees' income.

The penalty for not offering coverage is $2,000 per employee after the first 30. The penalty for not offering affordable coverage is even stiffer: $3,000 per employee who qualifies for a federal subsidy.

Because of fiscal cliff changes, it's more attractive for many businesses to pay the penalty rather than the cost of workers' health insurance, the CBO report says.

But at Wednesday's forum, the talk was of how larger employers could hurt themselves even more if they dropped coverage.

Jon Urbanek, senior vice president for sales and marketing for Florida Blue, one of the event's sponsors, said he's seeing "more engagement" from larger employers looking for ways to cut costs but keep coverage — and the best workers.

Mike Kelly, chief executive officer at PSCU Financial Services, said dropping coverage didn't cross his mind. Instead, he's invested in wellness programs to reduce costs, purchasing balance ball chairs and treadmill desks, offering smoking-cessation programs and free fruit. He said these and other efforts meant the insurance bill was about $800,000 less than projected last year.

"This is the right thing," he said.

Small companies, those with fewer than 50 employees, may face the biggest challenges, said Urbanek. Though not required to offer coverage, those that do must have richer benefits than most do now — a maximum $2,000 deductible and $6,000 maximum out-of-pocket costs.

Small employers make up about a quarter of Florida Blue's market, he said, and the insurer is trying to keep them by holding down other costs, such as workers' compensation coverage. Still, he said, "We do see some pretty significant impacts to small businesses."

Businesses say health insurance is key to keeping top employees 02/06/13 [Last modified: Thursday, February 7, 2013 12:04am]

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