Is Your Organization Ready for Health Care Reform?

March 23, 2010 marked the beginning of health care reform with the signing of the Patient Protection and Affordable Care Act (PPACA).  The short- and long-term cost implications for employers stretch a far as 2018 and it is important for employers to prepare for reform in order to avoid costly “surprises” later on.   Some health care reform provisions have already begun. The PPACA will require changes in many company’s health benefits, accounting systems, as well as reporting, controls and compliance systems.

According to Deloitte CFO Insight, due to “PPACA’s complexity, the need for regulation, and the lengthy design/cost planning cycles…. employers should begin working on their health reform now—2010!” It will be necessary for organizations to adjust accounting and disclosure practices. They will also be expected to collaborate with human resources in order to successfully and cost-effectively transition and comply with the new health care regulations. Communication with employees is also vital and can greatly impact the structure of plans the company offers in later years.

The PPACA timeline effectively began as early as June of this year (2010). A temporary $5 billion federal reinsurance pool specifically reserved for pre-65 retirees was created. The June regulations also forces employers to apply for coverage. This pool expires in 2014 or when the allocation is exhausted, further stressing the need to be aware of PPACAs timeline. This PPACA provision has potential financial benefits for employers as it provides medical benefits for early retirees. This is just one example of the many reform provisions which will continue as far as 2018.

It is vital for employers in both large and small organizations to know the timeline of the PPACAs regulations. In order to minimize the potential financial impact, click here for the full report form Deloitte CFO Insight for timeline and resulting implications. Do not stall in initiating the necessary changes. If employers do not begin initiating change now, their transitions will be rushed, ineffective, and costly. It is central for companies that a smooth transition takes place in these upcoming years of employer health care reform.