Winds of Change: Tulsa Analysts Warn Health Care Reform Laws Could Change Ways Americans Do Business

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Conforming to Washington's still-evolving health care reforms may change many ways Americans do business, Tulsa analysts warned Wednesday.

While President Barack Obama signed the 1,300-page Patient Protection and Affordable Care Act in March, many of its still- uncompleted provisions extend eight years into the future. Others require almost immediate attention.

"Some of the changes are critical because they're happening right now," said Denise Felber, a tax partner with the Tulsa accounting firm HoganTaylor.

In starting the first of three joint presentations by HoganTaylor, Oklahoma's largest accounting firm, and Tulsa's regional law firm Conner & Winters, Felber said the health care act could dramatically alter work force management strategies, regulatory reporting requirements and tax burdens. She recommended that executives immediately evaluate their business plans, compensation and retention policies, capital costs and pricing strategies.

Businesses should start first by considering whether to maintain potentially cost-saving "grandfather" status on their existing employee health care plans, said Conner & Winters partner Alissa Hurley. Such plans are exempted from preventive care requirements, adult dependent additions and several other reform changes.

"This is the most critical issue in front of you," Hurley said Wednesday. "Several provisions of the health care reforms do not apply to grandfathered plans. And I think the regulations have surprisingly big changes."

To claim a grandfathered plan, Hurley said businesses must have had it in force on March 23. Grandfathered status may be lost under a number of variables, including such common steps as raising co- insurance percentages, eliminating benefits for a condition or simply entering a new policy.

As companies renew their different health care plans, Hurley said they have the option of maintaining grandfathered status on certain programs and dropping it on others.

"It might be some plans are grandfathered, some are not, or one piece might be and one piece might not," she said. "You must be very specific."

Felber said these choices may factor into a wide range of business decisions, from job outsourcing to contractor definitions to corporate takeovers.

"We've already seen situations where clients are buying or selling companies and having the new grandfather rules come into play," said Conner & Winters partner Martin Wing. "When you assume an existing plan, it's moving from one employer to a new employer. For you it's a new health plan and it's not going to be grandfathered."

While C&W partner Steven McGrath said keeping grandfather status would probably be worth the effort, panelists noted a number of potential headaches, such as health care inflation, evolving regulations, documentation needs and provider responses to reform changes.

Tax burdens also enter into the equation, since some individuals will face penalties not only for not having medical insurance, but also for having higher levels of coverage - which could spur them away from some existing plans.

Under reform efforts, companies must start reporting to the Internal Revenue Service the value of the coverage benefits individuals receive. In 2018, individuals receiving high-cost health insurance plans, even if paying for it themselves, will face a 40- percent excise tax on the cost of insurance in excess of $10,200 for single individuals or $27,500 for families.

Reform efforts also promise to penalize companies that fail to offer minimum essential coverage or unaffordable coverage, using complex formulas factoring in a company's calculated number of full- time workers and plan participants.

"It's almost a penalty clause to hire lower-income individuals," said Felber, since those workers often don't maintain insurance, spurring an employer penalty. …