John Barkett on Employers and the ACA

December 26, 2014

John Barkett, Director of Policy Affairs for Towers Watson Exchange Solutions, was a guest on Wharton Business Radio this month. He was interviewed by his former professor, Arnold Rosoff, Professor Emeritus of Legal Studies and Business Ethics at the University of Pennsylvania’s Wharton School of Business, on the topic of the employer perspective on the Patient Protection and Affordable Care Act (PPACA). The segment was called “The Business of Healthcare” and it’s available for on-demand listening to subscribers of Sirius XM radio.

In case you don’t have a subscription, here are selected questions and answers from John’s interview:

On employers’ option to “play or pay”

John: I think the question of how employers are responding to the ACA is something that’s on everyone’s mind, especially because the ACA relies on employers to continue offering coverage as part of the overall makeup of the policy. The ACA has employers doing several things to support it.

First, it asks employers to “play or pay.” They can continue offering coverage to their workers, as most employers have done, especially large employers, or they can pay a penalty.

And, for the most part, those who have studied the bill and the law have suggested that employers will continue to offer coverage, and that’s certainly what we’ve seen among our clients. The vast majority of them plan to continue offering coverage.

On new compliance burdens

John: The compliance burdens that employers face right now have gone up dramatically because of the Affordable Care Act.

We’re talking about reporting requirements, new communications that they have to provide to their employees and new rules around waiting periods and working hours. All of these things have combined to give employers a lot of angst about the ACA in general, even if they agree with its policy goals, because it’s asking them to do a lot more.

On competition, choice, and the private exchange

John: One thing that has changed is employers have looked at the ACA’s public exchanges and said “Hmm, this exchange concept, choice and competition among insurers, maybe that is something that we could bring into our own benefits package.”

And so you’ve seen private exchanges start to come onto the scene. Private exchange providers run a marketplace for employer populations and allow employees to have choice.

On enrollment assistance

John: Most people need a lot of help to find the plan that best meets their needs, budget, and lifestyle.

Figuring out how to enroll in a health plan on the public exchanges is like being asked to do your taxes for the first time. So people are seeking help just like they do when they fill out their tax returns. They ask an accountant, they look for benefit advisors, they look for brokers, they look for navigators, they look for application assisters, there’s a whole host of programs out there that are going to help people go through the process. We’ve seen that the vast majority of consumers are willing to take up that help.

On the future of employer sponsored insurance

John: Employers offer health benefits to attract and retain top talent and that incentive is not going to go away. They’re still going to do everything they can to get the best people into their companies.

Now, the way they offer and administer benefits might change. They might choose someone else to administer the coverage, perhaps a private exchange. Or they might send some people to the individual market. But they are still going to fund benefits.

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