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