The deeper the pockets, the more likely it is that a Columbus-area company is comfortable with the Affordable Care Act enrollment that begins Tuesday and runs through March.
The major milestone in the 2010 law -- dubbed "Obama-care" by many -- is designed to offer health care in some form to every American. But it is not without its complexity, ambiguity and tension as employers large and small work to comply with the mandate.
"Essentially, we're telling (employees) our plans aren't changing in 2014," said Michael McKitrick, group executive of human resources at TSYS, which uses a self-funded health-care plan, one with a combined annual company-employee cost of $43 million, a number expected to rise in coming years.
TSYS will begin open enrollment for its insurance coverage in late October, with about 5,400 employees being briefed on what the health plans offer. But as the TSYS plans are unveiled to staffers, there will be one caveat in the discussion.
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"One of our big messages is that, unfortunately, you're going to be paying more because of the law," he said. "That expectation, they need to take that away, because that's going to carry forward in the future. The economics of this -- you can't expand coverage like this and not expect the law of supply and demand to not increase costs."
Obamacare is expected to offer health care to more than 40 million Americans who don't already have it. Insurance exchanges have been set up by 14 states, with Georgia and Alabama among those not participating, leaving residents in those states to use a federal or private exchange through various insurers.
The mandates are many. But one of the most dramatic in 2014 is that health insurers cannot deny coverage to anyone based on a pre-existing medical condition. There also will be caps on how much insurers can charge a healthy consumer versus one with a history of medical problems. Basically, for every dollar a healthy person is charged, those with ailments cannot be charged more than $3.
Those who decide to opt out of insurance coverage must pay a penalty, which starts at 1 percent of annual income -- or $95 per person, whichever is higher -- in 2014. It climbs to 2.5 percent of annual income, or $695 per person, by 2016.
Small businesses of more than 50 employees, meanwhile, must offer health care coverage or pay a penalty as well. That portion of the law has been delayed until 2015, however, with owners of small companies grappling with how to comply with the mandate.
John Anker, president of Ankerpak, a Columbus manufacturer of packaging material and other products, called the rollout of the new health care law a "scary ordeal" for businesses such as his. He has about 75 workers at his plant off 13th Street.
"At first, I was really relieved the employer mandate was not being rushed," said Anker, who has been in business nearly a decade. "I felt I could take another breath because the mandate was pushed back. But all it is doing is delaying the inevitable, and we know that."
There have been media reports that computer glitches will push online enrollment for small businesses back to Nov. 1, although paper filing can be done in the meantime.
"There are so many unknowns, so many variables, that we're going to look at changing our business model," said Anker, who has been crunching financial numbers with his staff accountant, Clay Hood, to determine what to do.
A change in the company's business model would hinge on using variable-hour employees to bring the total number of hours worked by each person under an average of 30 per week, the current federal hourly cutoff for part-time staffers, Hood said.
"That is one possible outcome of it," he said. "The other would be basically to shed off the line workers, and go to an employee lease model, or to temp out a lot of things, or even to just reorganize and get out of some of the labor-intensive aspects of our business."
Hood said the seemingly constant changes in the health care rollout and guidance has been frustrating.
"We would completely shed those revenue streams, which we don't want to do," he said. "But when you're looking down the barrel of $130,000 worth of penalties from the federal government or a $250,000 health care bill, what are you going to do?"
Joe Robbins, president of Columbus-based Freedom Home Care also is apprehensive about the effect the Affordable Care Act will have on his business. He has more than 500 part-time employees, many of them lower-paid caregivers for elderly residents in Georgia and Alabama.
"These increased regulations are creating a heck of a burden on small employers like us," he said. "I don't think when they were writing this law they even considered our business. We sell a service. Our focus is on seniors. My choice is to go ahead and raise my rates."
That, in turn, will prompt even more customers to turn to private "underground" caregivers and pay them rather than using Freedom Home Care's service, which costs more, he said.
Robbins said he currently estimates it will cost his company about $80,000 to offer the bottom-level "bronze" insurance coverage under Obamacare. The hope, he said, is that more employees will enroll in Medicaid rather than opt for coverage through the company.
"It's still going to be too much for them when they're only a little above the minimum wage, and they're living paycheck to paycheck," he said. "They're probably not going to want to spend the premium amount every two weeks."
The law calls for the federal government to help individuals and families pay their premiums through tax credits. The subsidies will be provided to those with household income between 100 percent and 400 percent of the federal poverty level. Exact figures will come as the enrollment exchanges open for business Tuesday.
And while local companies such as TSYS and supplemental insurer Aflac do have bigger budgets and much healthier revenue and cash flows, they also are feeling the pinch of sorts when it comes to wading through and complying with the health care law.
"We spent a lot of money on outside consultants and attorneys -- like a lot of companies -- trying to make sure we were in compliance," McKitrick said. "That's because there's not definitive guidance on all aspects of the law. There's an enormous amount of gray areas, and even the federal government recognizes that because they haven't issued definitive regulations."
Aflac released results of an open enrollment survey recently by Research Now that found that 71 percent of U.S. workers "only sometimes or rarely understand" changes made to their insurance policies in any given year. About 37 percent felt the current enrollment will be even harder to comprehend and make a sound decision on which plan is better.
"Workers will contend with three major factors this enrollment period, including employers' increasing adoption of high-deductible health plans, scaled down benefit plans, and increasing premiums," said Audrey Boone Tillman, Aflac executive vice president of Corporate Services.
"All of these changes require workers to pay even closer attention and have a full understanding of the benefit plans being offered to them," ehs said. "Not doing so may put them at high risk for higher deductibles, co-pays, or gaps in coverage that can result in unmanageable out-of-pocket costs if an emergency occurs."
Aflac said it expects the Affordable Care Act to have "minimal impact" on its 4,600 employees in the U.S., with about 3,7000 of those in Columbus. It also has workers in New York, South Carolina and Nebraska.
"Our health-care offerings are generally regarded as very strong now, as they were prior to the passage of the new law," said Boone Tillman, noting the company pays a "significant" percentage of their employees' health care tab.