Cost vs. strategy
How to deal with health care reform to
mitigate costs and retain a good image
interviewed By ADaM Burroughs
T
he financial impact of the Patient
Protection and Affordable Care
Act (PPACA) may seem to be its
most challenging aspect. Mitigating that
impact may seem like the most practical
solution. However, Ron Present, health
care industry group leader at Brown
Smith Wallace, says, “There are a lot of
strategic implications to what you do and
how you do it. Management should avoid
just calculating the math and saying,
‘This saves us money so it’s what we’re
doing.’”
To that point, Bill Goddard, principal,
insurance consulting at Brown Smith
Wallace, says, “You should consider
many potential solutions before making
a decision that could drastically diminish
your ability to retain and acquire talent,
and keep your workforce engaged.”
Smart Business spoke with Present and
Goddard about dealing with health care
insurance after the PPACA from a cost
and strategic perspective.
How has the PPACA affected private
insurance?
Starting Jan. 1, 2014, employers with 50
or more full time or full-time equivalent
employees, considered large employers,
must offer health insurance that fits
certain affordability and coverage criteria
or face a penalty. This could have an
immediate impact on an employer’s cost
to provide health insurance because a
group of employees that had not had
insurance may enroll in the plan and
because of pre-existing conditions or
high use of care, will cost the employer a
significant amount of money.
Also, the health care law changes the
status of some who had been considered
part timers for insurance purposes to full-
4 Insights: Accounting
William M. Goddard
CPCU
Principal,
Insurance Advisory Services
Brown Smith Wallace
(314) 983-1253
[email protected]
Ron Present
Principal in
charge, Health Care
Advisory Services
Brown Smith Wallace
(314) 406-5105
[email protected]
WEBSITE: For more on this topic, visit
http://bswllc.com/industries/health-care.
Insights Accounting is brought to you by Brown Smith Wallace
time employees. In some industries, many
employees have not historically taken
health insurance, sometimes as much as
66 percent of a company’s workforce.
These employees will need to be offered
coverage, potentially tripling costs.
How might that impact employers?
Companies are calculating their potential
risk to cost. However, that’s only one
aspect. The other is the strategic impact.
Some companies have considered
limiting their variable hour, or part time,
employees, to less than 30 hours per
week to reduce the number of employees
considered full time. To maintain an
adequate workforce, such changes can
require hiring additional employees, or
changing existing employees’ workloads
and job descriptions to keep up
production and prepare for 2014.
Should employers not provide coverage?
Let’s say a large employer decides not to
offer health