Connecticut businesses are starting to sweat over complying with the federal health-reform law, passed by Democrats and signed into law by President Barack Obama on March 23, 2010. Ruben Nogueira says he’s already hearing complaints about the Patient Protection and Affordable Care Act, even though much of it has yet to go into effect.

“A lot of employers are concerned,” said Nogueira, a partner of BPS (Benefit Planning Services) in Norwalk. His firm puts together employee benefits packages for small companies. “My personal and professional opinion is the reform law is going to increase health-care costs. Just about every provision of the law is going to cause that to happen.”

The main complaint he’s getting is about the mandate to allow parents to cover their children up to age 26 under their policies; the state passed a similar law last year. That’s one of the few tenets of the federal law already in place.

Nogueira said his clients, which include roughly 225 companies in Connecticut, are also fretting over other parts of the law that will be enacted next March 23. Such as capping the amount of pretax dollars employees can put into medical savings accounts, from the current unlimited amount to $2,500. These accounts are a tax shelter for employers. And eliminating the grandfathering of current health plans if changes are made to them to abide by federal stipulations.

Besides covering children up to age 26 on their parents’ policies, other federal provisions have gone into effect. Insurance companies have been barred from discriminating against kids with pre-existing conditions. Small businesses are receiving tax credits to help them pay for health care. And seniors and people with disabilities are receiving checks to help pay for their prescriptions, under the Medicare Part D provision, during the so-called donut-hole period when they must pay 100 percent of their medicine on top of monthly premiums.

Nogueira cited other elements of the law that he said will increase the price tag of health coverage for employers: barring pre-existing conditions as a reason to deny coverage; getting rid of lifetime benefit caps; and covering psychiatric illness and substance abuse on parity with physical conditions.

“All these things are well and good by themselves, but will add costs to health care. Premiums will rise,” said Nogueira. “Nothing in this law reduces health-care costs.”

John Giardino, director of human resources for Ring’s End in Darien, a lumber and building materials company, is one of Nogueira’s clients. He said while he hasn’t read the Patient Protection and Affordable Care Act, he doesn’t like what he’s been hearing.
“Health insurance is expensive now, wait until it’s free. But there’s no sense sweating it because you don’t know what’s happening yet. November could change a lot of things,” he said of Election Day, when Republicans might take over Congress. Many are already trying to repeal the law.

Another voice

To the contrary, Ellen Andrews, executive director of the Connecticut Health Policy Project, said the federal law will actually save employers money because health plans will be more affordable, especially for small businesses.
Even with having to provide a better policy.

“You can’t offer the same kind of crap that you offered before. The only people this is an issue to are those who weren’t offering fair coverage,” she said. “Some businesses offer plans with high deductibles and high premiums that don’t cover a lot.”

Andrews estimated that over 40,000 small businesses in Connecticut are going to get subsidies to help them purchase employee policies. And the penalties for not offering decent coverage only apply to businesses with over 50 employees.

“And it’s going to reduce the tax burden on all of us because it’s going to be efficient,” she said. “It’s the greatest thing.” The law says policies must include preventive care, which is cheaper than treating full-fledged illnesses.

The federal mandate also caps the amount of loot HMOs can spend on administration, from a current 50 percent to 15 percent to 20 percent. “It gives businesses more value for what they’re offering. Businesses are going to do better because they know the dollars they are spending are actually going into health care. They know they’re getting value in what they’re paying for,”  Andrews said.

An option, only an option

Connecticut’s new SustiNet law, passed July 20, 2009, complements the Patient Protection and Affordable Care Act but doesn’t target insurers and is otherwise less comprehensive, said Andrews.

“SustiNet is the public option the feds never passed. It’s just another option. Nobody’s going to be forced into anything,” she said. The SustiNet planning group is expected to give its final recommendations to the legislature next January and then onto the new governor for enactment.

It focuses on access and preventive care, reforms public and private healthcare coverage, but does not address insurance company practices as the federal bill does, said Andrews.