Q&A talks about the effects of healthcare reform on human resource departments with Matt Fair of Pierson & Smith, an independent and privately owned insurance firm with offices in Norwalk.
Q: You recently spoke on healthcare reform at an event called an HR Boot Camp. What were some of the points you got across?
A: The main message we conveyed to the human resources and executives attending was that the years between 2010 and 2013 are setting the stage for the major changes to our healthcare system in 2014. We cautioned HR professionals in attendance that a number of pieces of the PPACA healthcare law continue to change and evolve every day. The most effective way to address this overwhelming legislation is to focus on the short-term changes and what has been passed into law. At the same time, they should keep an eye out for the additional pieces in coming years. We also stressed the importance of the consumer becoming more involved in the purchase and engagement of their healthcare.
Q: How is healthcare reform going to change human resources? Does it make the job easier or more difficult?
A: There’s an old adage that describes the HR role as it pertains to PPACA reform: “Where there is difficulty, there is an opportunity.” Healthcare reform only adds an additional layer of difficulty to the HR professional’s role. Because there are so many parts of the reform law that are still undecided or changing from day to day, HR professionals need to focus on the short-term changes and forecast to the best of their ability regarding the future and its potential impact on their programs and costs. That’s not an easy task, as they are already expected to wear multiple hats. In summary, the job of the HR professional has become much more challenging. In this environment, it’s critical professionals rely on outsourcing and key advisors to provide accurate and timely information.
Q: How does health care reform affect wellness initiatives? From your perspective, how effective are wellness initiatives? Do they achieve their goals?
A: The PPACA reform focused on “access” and “affordability,” but did not go far enough in addressing the main issue of wellness in the United States. 85 percent of all healthcare dollars go toward claims (hospitals, professionals, prescriptions), and the main drivers of these costs are chronic diseases and lifestyle choices. There is not enough emphasis being placed on promoting wellness in the reform law. It does offer “grants” to employers under 100 employees to establish wellness programs for up to five years. The implementation and guidance is expected in the next few months (June). The program will offer $200 million in grant funding, which will be available to companies with fewer than 100 employees. These grants are to be used for health education, screenings and programs and policies that promote better physical and mental health. In 2014, the cap on wellness reward payments rises from 20 percent to 30 percent of single employee premium. HR professionals should be watching for the PPACA wellness applications, which should be released in 2011. As for how effective wellness programs are to employers, our opinion is that they are extremely effective if done correctly and with the support of executive management and human resources.
Q: From your perspective, how is healthcare reform going to change employment recruitment?
A: The importance of well established, generous benefit offerings will be even more important moving ahead. In our presentation, we discussed a recent study that asked employers whether they planned on playing (continuing to offer health insurance under the employer-based system) or paying (pay a penalty and have employees elect health insurance through the exchange). The results showed that 88 percent of employers will definitely or are very likely to “play.” In our opinion, employers of all sizes will still seek to differentiate themselves by the health and benefit packages they offer to employees. Recruitment and retention will still rely heavily on the health insurance piece — the cost to the employee, the quality of the plan design, and the network of doctors.
Q: What impact is mandated insurance going to have on companies’ human resources operations? Are additional human resources hiring going to be a hidden cost of healthcare reform?
A: This may be another unintended consequence of the PPACA reform. From our perspective, HR professionals are being asked to do much more with far less. The informal measure used in the past was that for every 50 employees there was one HR professional. Today, for every 100 to 150 employees there is a single HR professional. The ability to outsource and/or rely on expertise outside the organization will be a key part of their success. There are many outside factors pressuring companies today, including the economy, debt and unemployment, yet healthcare costs continue to climb. Additional HR resources may be badly needed, but are often not available.
