With healthcare, 2018 may be like a game of Jenga

Ryan Cook is the owner of First Class Realty Group in Raynham. He had a highly-talented office manager, a single mother with three sons, that he wanted to retain as an employee. But he couldn’t.

“All small business owners seek to attract and retain top talent,” said Cook. He researched the possibility of offering his office manager health insurance, but, he said, “When I looked at the cost, it was prohibitively expensive.”

And that left his employee with no choice.

“I ended up losing an excellent employee to a larger company that was able to offer her better benefits,” said Cook. When asked the impact of the Affordable Care Act on small businesses, Cook notes that a lack of affordability is the real problem: “Many of the small business owners I know keep their number of employees below 50 to avoid the ACA’s employer mandate,” he said.

Cook’s frustration is becoming more and more common among employers.

“Employers are really concerned around compliance,” said Anthony Cabana, vice president of benefits at Cross Insurance, an independent insurance broker representing clients in the health insurance marketplace across New England. “We’ve seen fines in excess of a million dollars and suddenly a company has 30 days to respond.”

He said the complexities of the ACA are forcing businesses to spend more on internal costs just to manage their health care programs. And that’s where Cross can play a role, he said.

“What we do is work together to come up with a strategy, understand a client’s needs, execute that strategy and then measure how well their objectives are being met,” Cabana said.

Whether the employer mandate gets taken out of the ACA or not, Massachusetts businesses will have a legal obligation to offer health insurance. If the mandate “goes away under the tax reform bill, it won’t have a direct effect in Massachusetts because we will still have a state-level mandate under the 2006 state law,” says Christopher Geehern, executive vice president of Associated Industries of Massachusetts. His organization represents small and medium-sized manufacturing companies.

To further complicate healthcare costs and compliance efforts, Geehern said Massachusetts employers are subject to a $200 million assessment for the next two years. He predicted the state will use that “to close the budgetary shortfall in the state’s healthcare program.”

Mary Ann Chirba, Boston College Law School health care scholar

Mary Ann Chirba, the lead author of a textbook on the healthcare law (Health Care Reform: Law and Practice) who also teaches a course on the ACA at Boston College Law School, likens the present-day stability of the ACA to a game of Jenga. Every change is like another wooden block being pulled out, making it more unstable until it finally topples. Republicans “could just repeal the whole tower,” says Chirba, “but they could also take out one piece at a time and completely destabilize the ACA, until it collapses.”

What should employers do?

As the PwC Health Research Institute explains in a recent report:“Organizations should focus on understanding how potential policies would specifically affect their business projections, and construct volatility ranges for those policies.”

In other words? Businesses must be ready for anything. Partnering with insurance companies and benefits providers to comply with, and monitor, potential ACA changes coming down the pipeline will be a key for Bay State businesses as they seek to remain agile and adaptable.

Especially because the IRS is paying attention. In November, the Internal Revenue Service sent letters to thousands of U.S. businesses expressing an intent to enforce the tax-penalty provisions of the ACA against non-compliant organizations.

Employers who fail to offer qualifying coverage to employees could face IRS fines of $2,000 per employee violation. And if that isn’t scary enough for businesses, the Congressional Budget Office projects that the U.S. government will collect over $200 billion in ACA-related penalty payments in the next decade.

Most businesses lack the in-house expertise on the complexities of complying with the Affordable Care Act. At the same time, employers will be faced with tough decisions around what plans to offer, not only to remain compliant, but to attract and retain talent.

“Employer decisions are going to come down to what [healthcare] plans to choose, how much money to kick in for coverage, and what benefit packages should look like,” explains Chirba. “Certain employers have to offer better benefit packages because they want to attract talent and retain talent.”

More than ever, it’s vital that businesses get their healthcare expertise from trusted, knowledgeable partners and advisors. Because for now, the only certainty around the ACA is the uncertainty of its future.

“It takes a village to manage this,” Cabana of Cross Insurance said. “It’s not a one-person job.”