Dan Bauman
The St. Louis Business Journal
Like many businesses, Clayco Inc. has been gearing up for key features of the Affordable Care Act (ACA) that kick in Jan. 1, 2014. Russ Burns, president of the Chicago-based development firm with a 706-person branch in St. Louis, said the company already offers health insurance to its employees and has spent the last several months educating themselves on ACA provisions and creating a compliance platform.
Burns said Chesterfield-based benefits consultancy J.W. Terrill has helped Clayco develop the compliance platform and doesn’t foresee any sweeping changes being made due to ACA implementation. Clayco posted $872 million in revenue in 2012.
Many businesses are preparing for ACA compliance with the help of consultants in St. Louis and around the country. Local consultants, including J.W. Terrill, said their firms had been very busy over the last year as they educate new and current clients on the issues surrounding the law.
Lynda Baris, executive vice president with J.W. Terrill, said the firm added several new clients because of health care reform, along with other consulting areas. In the past year, five full-time people have been hired at the firm, Baris said. At Cornerstone Insurance Group, Lecie Steinbaum, director of plans, services and compliance, said four individuals were hired to meet increased demand. And at St. Louis-based Brown Smith Wallace, Ron Present, principal and health care industry group leader, said he had just hired a new manager.
Meanwhile, Denver-based Newpoint Healthcare Advisors, which caters to hospitals, invested less than $500,000 to open a branch office in Creve Coeur in June. Managing Director Barbara Ladon said the firm also has seen increased demand because of ACA implementation.
The specific health care consulting segment that deals with hospitals, physicians, pharmaceutical companies and insurance providers, according to a report by market-research firm IBIS World, is a $10 billion industry. The report projects that those advisory firms will maintain a strong profit margin through 2017 as major parts of health care reform are implemented.
Small Business ACA To-Do List
1. Get the correct ACA information. With a large amount of false info about the ACA floating around, it’s important to speak with an expert to learn about the different aspects of the law, according to Chris Johnson, vice president and manager of consulting services at J.W. Terrill. That’s sentiment is echoed by Ron Present, health care industry group leader at Brown Smith Wallace.
“There is so much misinformation out there. Employers may get one thing from a friend; a broker may tell them something else; they may hear something on the news or in the media slanted a little bit differently,” Present said. “They don’t know where to turn, so they’re trying to figure out what to do.”
2. Determine your financial position…. J.W. Terrill Executive Vice President Lynda Baris said many employers have started to analyze the cost of ACA implementation in 2014. “Unfortunately, they may have compressed margins and really tough decisions to make about how to deal with costs that might increase for them because of the act,” Baris said. According to J.W. Terrill, up to $900 billion in new taxes will be levied on employers.
3. ….But don’t forget to account for your strategic position. While a financial assessment may convince a business to stop offering insurance, Present and Bill Goddard, principal and director of insurance consulting at Brown Smith Wallace, said firms should look at the strategic impact of such a decision. Employers should consider effects on market share, the employee-employer relationship, the bottom line, tax obligations and beyond before anything is final.
4. After development, monitor your plan. Lecie Steinbaum, director of plans, services and compliance at Cornerstone Insurance Group, said after an ACA compliance plan is established, it will be essential for employers to constantly monitor the plan and make sure it meets minimum essential value at an affordable rate.
5. Educate your employees. Steinbaum said employees are used to going to their company’s human resources department to learn about their benefits. Under ACA, employees will have to individually comply with the new rules and laws. While the law doesn’t require employers to educate employees, Steinbaum said it’s a good idea for employers to explain the law effects on its workforce, which is why it’s also important to have the right information (see item No. 1).
Dan Bauman 