Outlook Conference Exclusive: The C-Store's Guide to Obamacare
Obamacare survivalist Nick Tate outlines the what, where, when, how of health care
SCOTTSDALE, Ariz. -- At the end of the day, it's pretty safe to assume that Nick Tate, author of the “Obamacare Survival Guide,” delivered his speech to a somewhat hostile audience at the Outlook Leadership conference in Scottsdale, Ariz. It's no secret that much of the convenience store industry views the upcoming insurance mandates with a skeptical eye.
And he did little to defend it, but not much to knock it down a peg either. When asked if he was for or against it, his answer was "both, neither …" and then he began to spell out why.
First, he tried to sum up, out of the some 11,000 pages of regulations, how Obamacare will "change the game for businesses and consumers." The hope is, after all is said and done, that the law will be responsible for a potential 45 million new insurance customers. It seems pretty farfetched considering the preliminary numbers indicate fewer than initially projected are purchasing healthcare policies. But none the less, it means changes are afoot for how the c-store industry deals with health care and its related costs.
- Oct. 1 marked the first day consumers could sign up for health insurance in one of four varieties: bronze, silver gold and platinum.
- Consumers can choose their plans from either state-sponsored marketplaces, or the slow-to-its-feet, federally-run Affordable Healthcare Exchange.
- By Jan. 1, all Americans must have insurance or pay a penalty to the IRS.
- Insurers will NOT be able to bar Americans with preexisting conditions from having insurance.
- In 2015, companies with 50-plus workers will pay a fine to the IRS if they do not offer healthcare insurance to their employees.
It's not all negative, however, Tate said. There are benefits for consumers and companies alike.
- Small companies that employ 25 or fewer workers can use new exchanges, and apply for a tax break if they cover their employees' health insurance. These companies can qualify for a tax credit up to 35% of their premiums. In 2014, it will rise to 50% for those that purchase insurance through the new Small Business Health Options Program. These programs are estimated by some to help lower annual premiums for businesses by one to four%. (According to Tate, full implementation of the SHOP program has been delayed until 2015 by the Obama administration, citing challenges in establishing the new health insurance marketplace.)
- Many insured Americans as well as the companies that insure them have already received rebate checks under a new set of rules that require insurance companies to spend 80 to 85 cents of every dollar on medical care.
It's a different, and seemingly more complicated story for larger companies. There are more rules, more fees and more stipulations. The gist of the situation is that if large companies do not offer their employees insurance plans that meet the law's requirements, they could pay up to $2000 in fines, per worker, to the federal government. What was originally set for Jan. 1 2014, has now been postponed a year by the Obama administration.
One of the new mandates are the quality of plans and whether or not they fit the strict criteria of the law:
- The plan must ensure that the insurer covers at least 60% of an employee's medical expenses.
- The law limits deductibles to $2,000 for an individual and $4,000 for a family.
- Premiums can't be more than 9.5% of an employee's total gross income.
- A $3,000 fee will be levied against companies that do not offer their workers plans that meet the government's specifications of affordability and minimum value.
Despite the unknowns and anticipated issues surrounding the law, some c-stores are doing their best to get ahead of it. Sheetz, Altoona, Pa., built a 2,200 square-foot health-and-wellness center last year. Cumberland Gulf Group, Framingham, Mass., is expanded health plans to include 1,500 additional employees in order to "retain and recruit top talent." In an effort to cut employee health costs and better align itself with its mission to make a difference in their employees' lives, La Crosse, Wis.-based Kwik Trip will open a health clinic at its headquarters that will offer wellness programs and acute care for 3,000 employees and their families.