Tips for Implementing Health Reform in Your Company

Health reform’s path from concept to signing into law has been emotional.  Health reform is now the law of the land.  The Patient Protection and Affordable Care Act, along with the Health Care and Education Reconciliation Act of 2010, form the law.  It’s expansive in content and length.  The law changes the health care system for everyone in the United States – individuals, employers, medical providers, insurance companies, and state and federal agencies.  No one in the United States goes untouched by this law.

So, now that we have health reform, does anyone out there know what we’re supposed to do?  How do we as employers implement it?  How do we sort through the requirements and features of health reform to determine priorities in our companies?  Where can we go for help?

I thought it would be good to look at a process for applying health reform in our companies.  Everyone recognizes the magnitude of the new law.  Its implementation schedule stretches ten years in the future with events happening each year between now and 2020.  So, let’s make a list of some steps we can take to define the implementation process in our individual company.

Step 1 -- Panic a little.

When I first saw the law, I panicked a little.  In fact, I panicked more than just a little.  When I first saw the number of pages and the drastic changes to our current health care system, I did have a panic attack.  The health reform law is bigger in size, scope, and impact than the Social Security Act of 1935, the Social Security Amendments of 1965, and the Employee Retirement Income Security Act of 1974.  However, as I started to break down the law into sections, I started to become more comfortable.  Some of the panic has subsided.  The law is still enormous, but I feel that I’ve already made progress.  I’m ready to go to the next step.

Step 2 – Separate Facts from Opinions

Actually, this step may be the hardest part.  We’ve heard lots of statements about health reform over the past months.  Some statements are opinions.  Some statements are facts.  Some health reform features only apply to employers.  Other features apply to individuals, insurance companies, state agencies, and federal agencies.  Look at the health reform law, summaries of the law, and timelines that identify actions for employers.  Seek out sources that give facts about what’s in the law and how it applies to employers like you.  Study these facts.  Use only reliable interpretations of the law as you plan your strategy for implementing health reform in your company.  Focus on what has to be and not pros and cons of the legislation.

Step 3 – Pay attention to dates.

Dates are the keys to unlocking your action plan.  Pay close attention to actions you need to take based on March 23, 2010.  This is the first key date.  Health reform was signed into law on March 23, 2010.  For example, March 23, 2010 is a key date for defining the grandfathered status of your plan.  Some actions need to be taken 90 days after the date health reform was signed into law.  Other actions need to be taken on the first plan year beginning after March 23, 2010.  Refer to timelines from reputable sources for your action items and the key dates that guide your actions.  You might even buy or print a hard copy of the law to help you along the way.

Step 4 – Take a picture of your plan on March 23, 2010.

As we said in Step 3, March 23, 2010 is a key date.  This date defines your plan’s grandfathered status.  A grandfathered plan means a plan in which someone was enrolled on the day health reform was signed into law.  So, the plan in which employees were enrolled on March 23, 2010 is your grandfathered plan. Grandfathered plans must include some health reform features, but not all of the features.

Here is a warning.  Be very careful about any changes you make to the plan you had on March 23, 2010.  At this time, we do not know what actions take a plan out of grandfathered status.  So, since your annual renewal date may be coming soon, carefully weigh the pros and cons for keeping your grandfathered status versus making plan design changes for the beginning of your new plan year.
Step 5 – Determine the effect of health reform on your plan.

Human resources and benefit professionals have a big job ahead.  Once you take a picture of your plan on March 23, 2010 and decide whether to keep the plan you have, you are ready to determine the effect of health reform on your plan.  Examples of things to think about include:

• Which group plans make up our company’s medical plan?
• Does the company qualify for any tax credits, such as the small business tax credit?
• What coverage is required under the grandfather rules?  What changes do we need to make?
• How does the coverage in health reform compare with the company’s current group plan?
• What is the timing and cost for changes required in health reform?
• Is the company eligible for the retiree reinsurance program?
• What are the new nondiscrimination rules for highly compensated?  How are these new rules to be applied?
• What is the new appeals process?  How does it apply to our company?
• Are there any Medicare and Medicaid changes that affect our plan?
• Do the automatic enrollment provisions apply to my company?
• How do the new W-2 reporting rules apply to my company?
• Is the company eligible to apply for a wellness program grant?
• How can we communicate health reform in our company?

Health reform allows for financial aid for companies choosing to participate in certain programs, such as the early retiree reinsurance program.  Determine your eligibility and apply to participate in the program very soon.  There are fixed dollar amounts available to aid companies.

Step 6 -- Make a list of design changes for your plan.

After you review the impact of health reform on your plan, contact your benefit plan advisor for help with your plan design changes.  Everything has a price.  Your benefit plan advisor can help you with getting a cost for the changes you need to make to your plan.  This person also can help you sort through what you need to do and when you need to do it.

Remember that the cost for making changes affect your benefit budget and your general human resources budget.  If your company bids on projects, you will want to have an updated benefit cost amount to include in bids for projects.

Step 7 – Look at the impact of other state and federal laws on your benefit plan and other human resources functions.

See if your State has requirements for coverage more generous than health reform.  For example, if your State requires coverage for dependents up to age 28, verify that the State requirement applies.  Check to see if your State will have their own high risk pool or if people with pre-existing conditions will need to be referred to the national high risk pool.

Examples of other things to think about include:

• Break time for nursing mothers, which comes under FLSA;
• Decision to participate in the long term care program under the CLASS Act;
• Reporting and disclosure requirements under ERISA as a result of plan design changes; and
• Application process for aid and grants.

Step 8 – Start a list of actions needed for 2010 and 2011.

As you complete the first seven steps, some of the actions you need to take will be very clear.  Pay particular attention to changes you must make to your plans for 2010 and 2011.  These requirements begin your timeline.  Practice planned panic.  Try not to worry about any other years beyond 2011 at this time.  If you are going to panic, panic about the more immediate future.  Panic over the other years after you get 2010 and 2011 squared away.

As you have completed the above steps, you have already jotted down actions you need to take during the implementation process.  At this time, make a more complete list.  You will notice that actions involve other departments, as well.  So, now it’s time for the next step.

Step 9 – Form an interdepartmental task force.

Identify the impact of your action items on other departments in your company.  Form a close bond with accounting, payroll, tax, legal, IT, and executives.  Put someone from each of these departments on your task force.  Your task force must be a team.  So, dust off that team-building binder and get to work!  If you have a training department, they can be a tremendous resource.

Step 10 – Develop an action plan.

Now it’s time for each task force team member to practice those project management skills.  In fact, if you have a project planning department in your company, get that person involved early to help with the implementation plan.  Have a team member serve as manager for the project.  Each team member will have an action plan for his or her department’s contribution to implementation of health reform.  Merge all of the action plans, being careful to identify the action item, steps needed to complete the action, the person who will be completing the action, and a target completion date.  Anticipate bottlenecks and plan ways to avoid them.  A little planning goes a long way to making this effort successful.

Step 11 – Keep your action plan updated by keeping current on health reform guidance.

As you progress through the project, you will notice changes that need to be made to your project plan.  As the government issues new guidance, there will be changes to your project plan.  Plan to meet regularly with your team members.  Keep the plan updated.  Be sure to involve the project manager from beginning to end of the project.

Step 12 – Do what you need to do for 2010 and 2011.  Then start looking at future years.

I couldn’t come to grips with all of the health reform law at one time.  So, I have broken the 10-year timeline into sections.  These sections are based on the number of actions needed during each year and the difficulty I thought I would find when I applied the actions to my plan.  Here’s how I break down my timeline:

1. 2010 and 2011
2. 2012 and 2013
3. 2014
4. 2015-2018
5. 2019-2020

It’s the tried and true method of divide and conquer.  We only have to use the first 5 letters of the alphabet to plan our timeline.  So, we have the ten year schedule divided into 5 letters of the alphabet.

Please don’t get me wrong.  This will not be a simple process.  Putting in health reform in our companies will take a lot of planning and action on behalf of many departments.  It can be done, however, if we break the process down into sections of time we can manage.

Remember this.  Health reform may undergo many changes over the next ten years.  Amendments mean changes to your project plan.  Make sure you keep up to date on new guidance as it is issued and requirements resulting from amendments to the law.  For example, there will be information coming from the States about the exchanges that are planned for 2014.  Make it a practice to check State and federal websites each day.  We have a law, but all of the implementation details will be worked out as we go.

That’s about it for my implementation tips.  This massive law can be implemented successfully with excellent planning and attention to detail from agencies directing the law’s implementation efforts.  In fact, successful implementation is found in the details.  Plan for an intense implementation period with many twists and turns in the road.  We still may panic a little, but a solid foundation of preparation and planning will ensure the project is successful.

About The Author

Wanda Rivers is one of the owners of Benefit and Compensation Specialists, PLLC (“BCS”), located in Houston, Texas.  She holds a BA degree in psychology from the University of Houston, CCP and CEBS certifications, and is a licensed general lines agent the State of Texas in life, accident, health, and HMO.  She is also a licensed property and casualty agent.  Wanda has conducted workshops on benefit and compensation issues and has held various positions in human resources over the last 30 years.  For the last 10 years, BCS has specialized in group insurance for companies of all sizes in all industries and offers human resources consulting services in benefit and compensation issues.  You may correspond with Wanda via the BCS website, www.bcspec.com.  You may also contact Wanda directly at 281.333.2255.