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Paperwork mounts for insurance workforce

Mike Chaney

Mike Chaney


Businesses in Mississippi are facing not just increased paperwork associated with the reporting provisions required under the Affordable Care Act (ACA), but also the possibility of defending the business from legal action and major fines if a government audit finds the business has failed to comply with any of the regulations.

The law has introduced many rules and regulations that will require a significant increase in compliance measures, said Mississippi Commissioner of Insurance Mike Cheney.

“This may create new  challenges for both the insurance and medical community,” Cheney said. “The ACA has created questions and confusion with what is needed and required by not only insurance providers, but also large and small businesses. It is important that anyone affected by changes with the ACA stay up to date with compliance requirements with this law.”

The good part is millions of Americans have gained access to health insurance coverage through the ACA. But Cheney said the expansion of coverage is not an expansion of the insurance workforce, nor the medical workforce. And yet both are expected to do more work to comply with the ACA.

Some businesses are sticking their heads in the sand, hoping that the ACA will just go away. Cheney said that is not a good strategy.

“I’ve told everyone I’ve talked to you that you need to get a good accountant and a good lawyer,” Cheney said.

In addition to the record-keeping burden, Cheney is concerned the unintended consequences will be for large employers to stop providing healthcare insurance. A large employer group can be subject to fines if any one its employers goes to the ACA website to purchase subsidized insurance instead of obtaining it through the employer.

“You are looking at some pretty severe penalties that could lead to those companies deciding to quit offering health insurance,” Cheney said. “I have talked with members of our congressional delegation as this is a serious subject. What we need with the ACA is common sense in complying with the law.”

Steve Armstrong, an employee benefits specialist with HUB International Gulf South, Jackson, said there are significant concerns about the audits from the Department of Labor (DOL). Employers with more than 50 employees are now required to track information about health insurance plans. But Armstrong said the sad thing is that the DOL is auditing some small employers as well.

“There are two small employers here in the state we are trying to help with the audits by providing information about plan design, plan documents, risk assessment, etc.,” Armstrong said. “According to the ACA, they really don’t have to comply. I suspect the DOL is testing the markets to make sure they have the audits right before they go after the big guys. It is scary. The DOL has hired a little over 1,000 auditors in the past couple of years and wants to hire 1,500 more in the next five year with the rollout of the ACA.”

While an insurance agent can help, employers have the biggest documentation burden, and must come up with four years of paperwork. Armstrong said there are a couple of built-in grace periods buried in the fine print that suggest if someone makes a good faith effort this year, they won’t get in trouble. But employers will have to show they have done a credible job.

“There are some companies out there doing a good job with this, trying to do the data right,” Armstrong said. “And I hate to say it, but there are still a lot of people out there hoping that this is going to go away. Employers need to know it is not going away. I see the government looking the other way a lot this year. But eventually businesses will have to comply.”

Armstrong now doesn’t ask insurance questions when he walks in to talk to a new prospect. He asks ACA compliance questions. What are they doing to comply with the law?

“When you are a small business that can’t afford to have three HR people on staff, it is an extra burden to track and fill out documents,” Armstrong said. “Some of the payroll companies are stepping up to help with some of the data. But at the end of day, it is up to the employer to get it right and turn it in.”

While a headache for insurance agents, Armstrong is more concerned about the impact on businesses in the state.

“It could throw more chaos on top of the chaos cake we already have,” Armstrong said. “But it will not change the requirements of employers today. If you don’t know what is going on, you are going to be in trouble.”


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