The Time Has Come As Confusion Mounts, Cautious Optimism Surrounds Health Insurance Reform

‘One calendar month is the calendar month, commencing with the first calendar month following the first day of employment, unless the first day of employment is the first day of a calendar month, in which case the calendar month commences with the first day of employment.’

That’s how one sentence, regarding employee start dates and how they affect a company’s calculation of full-time equivalent (FTE) employees, reads on the Mass. Office of Labor and Workforce Development Web site.

Carole Parlengas, vice president and CFO, and Christine Phillips, executive vice president with United Personnel, a staffing agency based in Springfield, said it’s also a good example of the verbiage surrounding the Commonwealth’s health insurance reform legislation that has their heads spinning.

“If just one sentence is overwhelming, think of all the other things we haven’t even seen yet,” said Parlengas, to which Phillips added that, while in many respects United Personnel has stayed ahead of the game in terms of implementing new requirements, there’s still an anxiety level surrounding what needs to be done, and how.

“From the beginning, we’ve said that we will work with whatever the state gives us in order to stay legally compliant and in step with the legislation,” said Phillips, “but we’re still nervous, because we’re not always sure what the state is doing.

“And from what I’m hearing, we’re actually ahead of some other companies who’ve gotten lost in the quagmire and are waiting for more direction.”

United Personnel represents the business sector that could be experiencing the most problems with the Commonwealth’s implementation of health insurance reform, signed into law by former Gov. Mitt Romney in April 2006. It requires all Massachusetts residents to have health insurance — the deadline was this past July — and through mandates and new filing requirements, places this responsibility not only on individuals, but state agencies, health plans, and employers as well.

Devil in the Details

While the plan has received little public criticism of late on administrative or legislative levels, employers are beginning to feel the weight of the new paperwork required by the law.

Staffing agencies are particularly stymied, trying to understand how to efficiently file new forms when employees are temps, often starting a new position multiple times throughout the year. This makes it difficult to pinpoint how many FTEs an agency actually has, not to mention those employees are scattered throughout various businesses, not contained in one office.

“I don’t think the administration ever thought about transient employees,” said Parlengas, who, over the course of the last month, has attended several meetings with legislators, health insurance companies, and other staffing agencies across the state as they scramble to find their place in the puzzle.

“They thought of seasonal and part-timers, but not the temps.”

This concern has moved closer to the forefront in recent weeks due to the arrival of the first round of new annual filings for employers that are part of the legislation.

Employers were notified the week of Sept. 24 that beginning on the first of October, they would receive their first Fair Share Contribution report (FSC), which can be completed online and details whether or not an employer with 11 or more FTE employees has made a ‘fair and reasonable contribution’ to their employees’ health insurance, and if not, to what extent a per-employee Fair Share Contribution (of up to $295 per employee annually) must be paid.
Employers have also received a second form, the Employer Health Insurance Responsibility Disclosure report (HIRD), which confirms whether or not an employee has been offered a Section 125 plan, a pre-tax payment system for health coverage and the minimum requirement for employers. Forms must be signed by each employee regardless of their decision to accept or decline the plan, and must be kept on file for three years.
Further, they must be filed with the state by Nov. 15, and that quick turn-around has many people reeling. Staffing agencies have arguably felt the pressure first, but Phillips said she wonders if similar worries will surface in other industries, such as health care, which employs a large number of per diem employees, and in restaurants, in which servers rarely work ‘normal’ hours.
“The data is the scariest thing; it’s going to be a few rocky years for some companies,” she said. “It’s the biggest piece of this right now — record-keeping, and producing the data the state needs.”
In some ways, the problems brought on by the new filing requirements start at a very basic level, Phillips noted. For one, the computer systems currently used at United Personnel have no way of ‘answering’ the questions posed by the state: questions such as ‘what is the percentage of the premium cost for individual coverage your business offered to contribute for all full-time employees?’
“We need certain tools in order to report the data correctly that we don’t have; our databases weren’t built to deal with such sophisticated queries,” she said, adding that for now, the process has become a very human one — and therefore very time- and resource-consuming. “It’s daunting that record-keeping has become so important … especially when we don’t even understand what constitutes a calendar month.
“I think that when this was being planned out, the administration was thinking in terms of standard jobs, and standard hours,” she continued. “When I think of people in restaurant and hospitality jobs, or the medical field, I think they must have some of the same challenges as we do. I don’t think the administration thought long on logistics.”

Painting with a Broad Brush
Still, some with a bird’s-eye view of the reform say that while some roadblocks are bound to crop up, the plan has moved ahead as smoothly as they could have hoped.

Mike Widmer, president of the Mass. Taxpayers Assoc. (MTA), spoke with The Healthcare News a year before the health coverage deadline, and at that time cautioned employers against leaping to any conclusions when the legislation’s reporting components began to fall into place.

“The classic, Massachusetts response at the first sign of trouble is ‘man the torpedoes,’” he said in May 2006. “We have to keep working, to progress into new territory.”

Today, his sentiments have not changed much.

“Massachusetts gets very high marks for how well the implementation has gone, and I include the Connector in that,” said Widmer, referring to the Commonwealth Health Insurance Connector Authority, an independent public authority created to implement significant portions of the health care reform legislation, including assisting qualified Massachusetts adult residents with the purchase of affordable health care coverage.

“The administration in general deserves high marks for implementing health care reform. It could have been a problem with a Democratic governor taking over after a Republican governor, but they’ve been sensitive to this and have not tried to reinvent solutions to the issues.

“It took a broad and unusual coalition to pull this off, and a group of constituencies sought to achieve compromises that have held together,” Widmer continued. “We’ve enrolled 200,000 people to date, and moreover, the Connector Authority votes on tough issues, like affordability. Those votes have been largely unanimous, and that reflects the compromise and proves that the board is not going to the mat on every issue.”

Widmer said he, too, has some looming concerns despite his confidence in the system, including the possibility of losing key federal funds.

“We are negotiating with the federal government to maintain funding in 2008 that is critical,” he said. “Once the reform was in place, they approved it, and we didn’t lose the money, but now, we must re-evaluate, and that’s going to determine how much funding we’ll get.”

The Finer Points

Jeff Ciuffreda, vice president of Government Affairs with the Affiliated Chambers of Commerce of Greater Springfield, agreed that while much remains to be seen, the current climate in the region seems to be one of acceptance of the law, and of respect for its objective. But like Widmer, he also guards his optimism.

“The roll-out of the products is being seen as fairly good,” he said, “and overall, we haven’t heard a lot of negative feedback. I do hope, though, that there aren’t too many people adopting a ‘let’s-wait-and-see’ attitude.”

Ciuffreda said he fears some employers may be unclear on some of the details of the legislation, in particular the role of the Fair Share Contribution, and that this could create a backlash later in the year as tax time approaches.
“I hope this lack of feedback isn’t a sign that employers are not understanding some of the fine complexities of the law,” he said. “When they file their taxes, they could face the first phase of penalty, and we could hear more complaints.

“The biggest misconception is that the Fair Share Contribution of $295 is a good deal, but that’s just the first part,” he added. “It could get exceedingly worse for those employers.”

That’s because if employees at a given company (of 11 employees or more) accrue more than $50,000 in health care costs drawn from the free care pool the legislation is aimed at eliminating, the employer is responsible for at least a portion of the bill, and possibly the whole amount.

“If the legislation hasn’t gotten people’s attention, those penalties will,” said Ciuffreda. “They’re not meant to fine; they’re meant to make health care ultimately more accessible for everyone, and by the end of this year, we’ll have a clearer picture as far as how that is progressing.”

Agents for Change

Despite the challenges they’re currently facing, Phillips and Parlengas also agreed that with any new legislation, especially one with such broad implications, there are bound to be some stumbling blocks along the way.

Overall, though, they’re optimistic that the Commonwealth’s health insurance reform will achieve its goal — to make health care universally accessible to Massachusetts residents.

“We’re patient, and we’re positive,” said Phillips. “We have a commitment to making sure we’re compliant, and we take doing business in this state very seriously.”
“Something needed to be done,” added Parlengas. “Even though it’s confusing now, and the employer bears the brunt — it’s important.”