Healthcare Reform and Large Employers

For most employers, preparing to comply with the “pay or play” requirement of the Affordable Care Act is shaping up to be a world-class headache. Large employers with multistate operations face their own set of challenges, and these were the topic of a panel discussion on Day Two of the Health Benefits & Leadership Conference in Las Vegas.

Brant Suddath, benefits director at Atlanta-based The Home Depot, said he was spending lots of time trying to figure out who, among the retailer’s approximately 120,000 part-time U.S. employees (out of a total employee population of 330,000) would qualify for healthcare benefits from the company. He added that it’s important to “work closely with your broker/consultants” on this and other ACA-related matters. Marisa Milton, vice president for HR policy, strategy and compliance for Bethesda, Md.-based Marriott International, said her company was working with financial models to determine how the law may affect Marriott financially.

“We’re taking a ‘the sky is falling’ approach, thinking about what the worst-case scenario could be,” she said. “The potential cost impact of this legislation is going to be huge, so we’re working with different departments–including finance–to figure out how this may affect the company and the changes we may need to make.”

Milton said the company was mostly taking a wait-and-see approach before making any major changes to its healthcare offerings, adding that she did not anticipate any big changes before 2015. “After 2015?” she said. “We’ll see.”

None of the participants–who, in addition to Suddath and Milton included Ed Bray, director of employee benefits at Hawaiian Airlines and Andrew Gold, vice president for total rewards at Pitney Bowes–said their companies were planning to stop offering healthcare benefits as a result of the new law, certainly not in the near term. Gold said Pitney Bowes may look at some options for potentially offsetting the cost of complying with the new law, including narrowing its network of healthcare providers and moving more employees into high-deductible health plans. However, the company is concerned about taking actions that may affect employee engagement, he said.

“Benefits are so important to employees now, and you have to make changes very carefully,” said Gold. “I don’t think we have the license to do the things we want to do just to drive costs down.”

A big concern for all of them is ensuring that employees understand how the law’s healthcare exchanges will work and whether they’ll make the right choices in terms of seeking coverage on the exchanges. “It keeps us up at night–who is going to be walking the employees through all these decisions?” said Suddath.

“The level of confusion among employees about this law is off the charts,” said Milton. “We’re starting to realize that we need to focus on helping employees gain a basic understanding of the law and what it means for them.”