Love, hate and the Affordable Care Act

In the legend, each person touches only one part of the beast and then offers wildly varying descriptions of it based on each individual encounter.

By Kevyn Burger
Wednesday, October 26, 2016

Six years after its passage, it’s the source of both help and hassles for small business

Don’t ask Taryn Krumweide about her job description at Wagner Falconer and Judd unless you have time for her to spell out her responsibilities at the downtown law firm.

“My title is ‘Shared Services,’ but I say I do everything — tax stuff, accounting, payroll and HR.”

Last year, her duties expanded to include administrative tasks associated with filing the mandatory Affordable Care Act forms for the 50+ employee firm.

“We had to do training about coding for the specifics of the ACA and manually added information about our employees. It adds a step in our record-keeping,” she says. “We had to provide additional tax forms and there were multiple delays on the government side.”

Six years after the ACA went on the books, it resembles the parable of the elephant and the men in the dark. In the legend, each man touches only one part of the beast and then offers wildly varying descriptions of it based on each individual encounter.

Today, depending on who you ask, the mandatory health insurance law is both too little and too much, an unwelcome burden and an overdue source of liberation.

The Bright Side

One fact that no one disagrees with is that the ACA has led to about 200,000 more Minnesotans being insured.

“Minnesota’s uninsured rate has been cut in half and is the lowest in state history,” says Shane Delaney, communications director for MNsure. The state’s health insurance exchange came online in 2013.

About half of those who get insurance through MNsure are covered through public programs; the rest are enrolled in private plans.

According to the Minnesota Commerce Dept., in 2015, 5.5% of all Minnesotans purchased their health insurance on the individual market. Many are eligible for tax subsidies.

“MNsure works with freelancers, people with nontraditional jobs, seasonal workers, and people transitioning between careers who need to buy their own insurance to bridge the gap,” Delaney adds. “Some of these people, or their dependents, have pre-existing conditions and were previously excluded or priced out of the market.”

An additional 5.4% of the state gets its coverage through small group plans. Businesses with 50 or fewer full-time employees can access insurance through MNsure. As of July 2016, a total of 286 Minnesota employers used the exchange to buy coverage.

Affordable? Really?

Year-over-year premium hikes along with escalating copays and ever-higher deductibles have become routine; for small businesses, the market feels volatile.

“These people remain anxious. They’re going to see additional rate increases, although the amount is not clear,” warns Prof. Stephen Parente, the Minnesota Insurance Industry Chair of Health Finance at the Carlson School of Management at the University of Minnesota.

“The law requires more vigilance and greater adherence to regulation. That’s never cheap,” he adds.

Thompson Aderinkomi has watched the evolution of the system as an original board member of MNsure and as founder of RetraceHealth, which provides health care through house calls and online video appointments.

“The Affordable Care Act is health insurance reform, not health care reform,” he points out. “If we can get costs down, then premiums will follow.”

Aderinkomi’s startup has had particular appeal to people with no health insurance so the ACA’s success in reducing the uninsured has challenged the company. Despite that, Aderinkomi anticipates the “changed dynamics” of the marketplace might ultimately be a benefit.

“The ACA has strengthened the individual insurance market. It’s still not where we want it to be, but it’s creating a viable market beyond the employer, and there’s never been a robust path outside that,” he says. “There’s more transparency, more options, but the cost hasn’t gone down and that’s what most employees care about.”

The Mandate Aspect

Historically, Minnesota’s large employers have set the pace; they’ve used top-flight insurance to recruit and retain employees. Smaller companies have often felt compelled to adopt the same strategy to be competitive in attracting talent.

“Prior to the ACA, that was all voluntary,” notes Lynn Blewett, who directs the State Health Access Data Assistance Center at the University of Minnesota. Her team conducts research on efforts to measure and monitor health insurance policy and coverage.

“Today, half of our private sector employees work for those large employers. The big companies have more reserves, more capital, more leverage in the market to negotiate price. Small employers are in a tough place. They don’t have those same resources.”

That’s a problem that Mark Young’s clients face. He’s the CEO of myHRcounsel, which provides on-call and online legal advice to HR departments. He’s watched the companies he serves struggle to comply with the mandates of the ACA, especially with complicated tax filings.

“The burden on small and medium businesses is daunting. They are strapped providing the detailed information needed to file for ACA. Few businesses with 250 employees or less have the resources to be self-sufficient on the required filings for these new regulations,” he says.

Young has seen mandatory reporting obligations create questions for his clients.

“We work with a staffing company that hires thousands of temps whose assignments vary in length. If any of them worked full time for one month, the company had to file for them,” he says. “Just imagine that.

“What about a part-timer who happened to work full time for part of the year? Or an employee who gets his insurance through
his union. Does the company file or does the union?”

Change — more or less

Health insurance reform is certain to be on the agenda for the incoming Congress.

“More likely than not, we won’t see major changes for a year or two,” says the Carlson School’s Stephen Parente, who served as health policy adviser for the McCain Presidential Campaign and has closely watched the politics of the issue. “If Republicans do repeal and replace the ACA, they might loosen regulations but keep subsidies in place. What they end up with will look a lot like what we have now but will be more business-friendly.”

He sees the market evolving — for employers, insurers and health care consumers.

“In the future, companies might give employees money for health insurance and let them go to the individual market, but right now, not many are willing to try that,” he says. “The labor market is tight right now and the last thing an employer wants to do is dissuade people from sticking with them over this.”