The Patient Protection and Affordable Care Act has been ruled constitutional as many of our members are aware. The courts 5-4 decision upheld most of the mandates and provisions of the act essentially requiring every American be insured or pay a penalty. Although ruled constitutional there remains some political uncertainty as to how each state will incorporate the federally mandated changes, especially the states traditionally controlled by the GOP. Without getting “too political” we will try to interpret the significance of this ruling for our members who own or run a business as well as interpret the effects on the industry as a whole.
For those who own or manage a business there are some basic useful facts:
- One of the law's provisions is the small business health care tax credit, which allows businesses with fewer than 25 full-time employees that pay at least 50 percent of total insurance premiums to qualify for a tax credit of up to 35 percent of their premium contributions. Also, the average annual wage for your employees must be under $50,000 to receive the credit. That credit increases to 50 percent in 2014 and is retroactive to 2010.
- For larger businesses with 50 full-time employees there is a requirement that they must provide health insurance to employees or pay a $2000 fine per employee. If you have a business with fewer than 50 employees, you will not face any penalties if you don't offer health insurance under this act. Starting in 2014, businesses with up to 100 workers may be able to buy health insurance for their employees through state-based purchasing pools called exchanges.
Here are two generalized sides to this debate regarding business owners:
- One side argues small business owners will now be able to purchase health insurance for themselves without fear of being turned down because of a preexisting condition or priced out of the market because of their age. Additionally, the tax incentives will enable them to provide more desirable benefit packages to employees.
- On the other side of the debate, some businesses with 40-49 employees argue they must remain stagnate, wary of the 50 employee threshold insurance mandate. A number of businesses with over 50 employees argue they cannot afford to provide health insurance to employees and the penalty will cause them to lay off workers or fold completely starting over with a new business model.
Micro level effects on the eye care industry as a whole are a bit more complex according to most insurance regulators. The way the PPACA was written, limited scope benefits plans such as dental or vision seem to have been an afterthought and are defined in one of two contradictory categories; as either an integral part of the overall health benefit plan or an exception. Confused yet? I’ll see if this helps...
- Included. If the limited benefit plan is included in a bundle of health insurance benefits and the employee does not have the ability to opt out of the coverage, the dental and vision benefits will be subject to the same terms and conditions as the overall health insurance benefits, including PPACA reform requirements.
- Excluded. If the limited scope benefit plan is offered on a stand-alone basis or is separated from the overall health insurance benefit package, the dental and vision plans (the separate limited benefits) can be treated differently and do not need to comply with many of changes that have been or will be required due to the passage of PPACA.
It is important to remember significant parts of the PPACA were written vaguely in order to give wide latitude to the state and federal agency heads who are in charge of implementing/ interpreting the mandates. Several of the mandates will not be put in place until after the upcoming election and the big winners (Democrats or Republicans) in November will have much to say on who heads the agencies. If Republicans surge in November look for possible regressions on policies linked to the PPACA, if Democrats hold firm, look for implementation to continue.
On a side note, VSP the nation’s largest stand alone provider is lobbying for standalone insurance plans to be implemented in the insurance exchanges, while the American Optometric Association is lobbying for vision care to be part of an overall health care insurance package. The Opticians Association of America believes that vision health should be a component of bundled care and support the pediatric vision care essential benefits identified in the PPACA.