5 Questions: Insurance specialist says healthcare changes will be complicated, potentially toughest on dairy producers
September 23, 2013
Like all business owners, the changes and potential challenges farmers, ranchers and dairymen will face as a result of the Affordable Care Act are just around the corner.
Oct. 1, for starters, is the deadline for employers to provide notification to employees about their health coverage options and the health insurance marketplaces.
John Reeves III, a specialist and regional broker with Aflac, has been touring the region in recent weeks, discussing with ag producers the approaching healthcare changes.
He also took time out of his schedule this week to discuss what producers should expect and what they should be doing in advance.
Below are portions of that conversation:
1. If you're an ag producer, what are the biggest changes you're going to see?
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A. That depends on the size of the operation.
For most farming operations, where you only have a few employees, there will be little changes, other than the additional regulatory oversight that will come with these new rules.
However, you have larger dairies that, in some cases, require many full-time employees. For businesses that have 50 or more employees, those operations will be required to provide insurance to all of their full-time employees … those working 30 or more hours, under the new rules … or they'll have to pay a penalty.
That rule and other portions of the new rules have been pushed off and won't go into effect until 2015, and could change before then, as discussions continue.
But, as the language reads now, the penalty would be $2,000 per employee, for employees No. 31 and up, I believe. From my understanding of the existing language, you wouldn't have to pay the penalty on the first 30 of your employees, but would on however many employees you have beyond that.
Furthermore, if you don't offer an employee a plan they can afford, and they then use a plan that requires a government subsidy, the fine is increased to $3,000 per worker. Obviously, there's a huge emphasis on the employer providing affordable insurance for their workers.
So, for the larger dairies that don't already provide health insurance for their employees, that's where you could see agriculture be impacted.
2. What about seasonal agriculture workers?
Answer. For vegetable and produce growers, who need a lot of seasonal labor during times like harvest, many of the issues that would impact them are still in debate.
If you're a worker who's not a U.S. citizen, you don't have to be covered under the Affordable Care Act … so seasonal migrant workers from out of the country wouldn't have to be covered.
But, like many of the issues that won't go into effect until 2015 and are still being discussed, there's still talks regarding how U.S. citizens doing seasonal labor would be impacted by the Affordable Care Act.
3. Are there any common questions or concerns that have been regularly brought up to you at your Affordable Care Act presentations for farmers?
Answer. Above all, it's just very apparent that they're frustrated in what they see as being told what to do … and that there's a lot of confusion.
And I agree, all of this is very confusing.
There are insurance brokers who still don't fully understand this, so how can small business owners be expected to.
It's going to take some time to get acclimated.
4. You noted during your presentation that certain states will be impacted differently. Why is that?
Answer. In choosing to set up their own state exchange, rather than just using the federal exchange, the insurance companies that are participating in Colorado's exchange, for example, have given business owners in the state more options than in surrounding states that are choosing simply to use the federal exchange.
In Colorado, you'll have about 150 different plans to choose from.
I've looked at the rates being offered in Colorado under the new exchange, and many are comparable to what's available now.
However, states that have opted not to create state-run exchanges and be served by ones run by the federal government (Nebraska and Wyoming are among those states, according to reports) will have limited choices.
5. If I'm a farmer, rancher, dairymen, business owner, etc., what do I need to be doing right now to be prepared?
Answer. First of all, all employers must provide the written notice to all current employees, regardless of part-time or full-time status, by Oct. 1 of this year. For employees hired after Oct. 1, the information must be provided at time of hire. (The notice, according to reports, needs to include: 1) a description of the health insurance marketplace, including a description of the services provided by the marketplace, and how employees may contact the marketplace for assistance. 2) Notification that, if their company's health insurance plan does not offer affordable, minimum essential coverage, that the employee may be eligible for a premium tax subsidy through the marketplace. 3) If the employee purchases a qualified health plan through the marketplace, the employee may lose the employer contribution (if any) to any health insurance plan offered by the employer and that all or a portion of such contribution may be excludable from income for federal income tax purposes.)
Above all, though, consult with an insurance specialist or broker, who's knowledgeable of the Department of Labor's and insurance department's role in all of these changes.
It's going to be complicated, and, rather than making a mistake, consult with someone up front.
It's also going to require a decent amount of computer literacy on behalf of the employer.
But most farmers and ag producers are quite computer-literate these days.