Wednesday, October 15, 2014

One Piece at a Time: Bite-Sized Federal Health Care Reform Webcasts Now Available

Let’s face it: federal health care reform is pretty complex. We know it’s tempting to avoid the topic altogether and just keep your fingers crossed, but now we’ve got an easier way to understand this complicated topic.

As the League’s Human Resources Director Laura Kushner puts it: “The Affordable Care Act (ACA) in its entirety is a lot to absorb—but if you take it one piece at a time, it’s easier to understand and is less overwhelming.”

So what if you could just sit down with the experts and have them explain exactly what the implications are for Minnesota cities—and what you need to be doing right now?
With that goal in mind, the League of Minnesota Cities (LMC) recently rolled out a new tool to help cities navigate this legislation. Partnering with Gallagher Benefit Services and Madden Galanter Hansen, LLP, LMC created a series of videos and podcasts—referred to as webcasts—on important topics cities need to understand about the Affordable Care Act.

There are currently a half-dozen webcasts posted on our website that range from ten minutes to 24 minutes. “We wanted to provide relatively small and easy-to-absorb ‘chunks’ of information about health care reform,” says Laura.

Each of these webcasts takes a close look into a different topic, including information on employer shared responsibility, measurement and stability periods, stand-alone HRAs and stipend agreements, and smaller employer requirements.

Not sure where to start? Laura suggests cities start with the episode about the Cadillac plans tax and the one on labor negotiations issues.

Even though it is not applicable until 2018, the Cadillac tax may impact more cities than one might think—which means you should start planning ahead.

The Cadillac plan  is determined based on the cost of the health insurance coverage provided to your city’s employees. The tax comes in when this coverage costs more than the specific amounts set forth in the ACA (single coverage exceeding $10,200 annually, or family coverage exceeding $27,500 annually).

And it is a hefty tax—40 percent on the value of coverage that exceeds those Cadillac plan thresholds. So this is where the labor negotiations webcast ties in. Cities that might be subject to this tax should start negotiating with unions now in order to avoid said tax. Why?

“Many labor contracts in Minnesota are ‘locked into’ providing a certain level of benefits to employees at a certain level of cost to the city,” explains Laura. “That can be nice for everyone because it provides stability for both the city and the employees. However, the problem is that there may not be any ‘wiggle room’ for the city as health care reform requirements begin to kick in.”

In other words, the city may be forced to continue to provide a level of benefits that results in the 40 percent Cadillac tax and have few options to negotiate this situation with the union.

Keep in mind that as health care reform is being implemented, new regulations are coming out continuously. “Cities that do not pay attention to these regulations may face stiff penalties or extra taxes that could substantially impact both current and future city budgets,” says Laura.

So Minnesota cities, please: pay attention now so you don’t pay the price later! We at the League are here to help.

Should you have questions about federal health care reform, feel free to contact LMC’s human resources and benefits department at (800) 925-1122.

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