With the approach of Jan 1, 2014: when many of the Affordable Care Act's (ACA) key provisions kick in: CBIA's multiyear initiative to guide Connecticut employers through the complexities of Obamacare has kicked into high gear.

Since March, CBIA has leveraged its media resources and public policy and insurance expertise to conduct a wide range of ACA-related outreach activities for Connecticut businesses of all sizes as well as the insurance agent community.

Our activities include leading 19 conferences and workshops throughout the state (attended by more than 2,000 business leaders); fielding hundreds of member calls to the CBIA Hotline; producing 20 CBIA Business Minute radio spots for WTIC-AM in Hartford and WICC-AM in Bridgeport; and creating an online Healthcare Resource Center, which has seen more than 7,000 visits since June. In addition, CBIA's ACA experts have been interviewed by more than 14 print and broadcast media outlets from across the state.

Because of the new federal regulations, we have also created a brand-new suite of competitively priced, ACA compliant health coverage options for member companies participating in CBIA Health Connections, our private-sector health insurance exchange. In addition, in early 2014, we'll be releasing a new Web portal to make it easier for employees of companies participating in Health Connections to choose and make changes to their health coverage.

All these initiatives are designed to ensure that CBIA members stay ahead of the curve on healthcare reform, dispel misconceptions about the ACA, and reduce employers' anxiety over the law's confusing array of requirements.

"In 2014, the ACA will impact nearly every company that offers employee health benefits," says CBIA's president and CEO John Rathgeber. "CBIA's decades of experience as a trusted advisor on human resources and an administrator of a successful private-sector health insurance exchange puts us in a good position to help the employer community understand the law and its impact."

In September, NBC Connecticut invited Rathgeber and other key stakeholders to participate in a roundtable discussion on the ACA to help the TV station's producers and news reporters understand the ins and outs of the law and convey accurate information to viewers.

"In educating people about these issues, you have to be careful to understand the differences between the various market segments," Rathgeber points out. "People in the individual health insurance market are going to see very significant changes; some will benefit from lower premiums, and others will pay more. You have to look at the employer market separately and further stratify that to distinguish between companies with under 50 full-time equivalents (FTEs) and those with 50 or more. The ACA is going to affect all these groups differently."

CBIA Comes to a Town Near You

CBIA's Ken Comeau talks to small-business owners about their options and obligations under the Affordable Care Act.

From Darien to North Haven, Rocky Hill to Norwalk, CBIA has been conducting ACA workshops and conferences for small employers and larger companies, as well as insurance agencies and their clients. Ken Comeau, CBIA's vice president of sales, products, and services: and CBIA's main presenter on the ACA: is not surprised that these events have been filling up as fast as they are scheduled.

"Small employers have had so little information that they don't know what's coming at them," says Comeau. "They worry about what they don't know. There are changes they have to be aware of, which means they'll have to do some things differently."

CBIA's HR counsel, Mark Soycher, also sees the lack of familiarity with the new regulations: fueled by the realization that Jan. 1 is right around the corner: as a prime driver of high attendance at CBIA's ACA programs.

Soycher facilitated a Sept. 25 conference for companies with 50-plus FTEs, which drew more than 80 employers.

"I was shocked when I asked audience members how many of them are attending their first educational session about the Affordable Care Act," he recalls. "I thought I would see maybe 10 hands go up, but it was well over half the attendees."

Reactions to the programs from attendees have been very positive.

"It was a great way to bring together a good-sized group and explain what's going on," says Mike Sutton, a partner at Benefit Planning Services LLC in Norwalk. "It was very good give-and-take, not just somebody standing up there running slides. I thought Ken and Phil [Vogel, senior vice president of CBIA Service Corporation] did a great job."

Mark Tyszka, HR director at the Connecticut Public Affairs Network Inc., agrees.

"The presenters did a superb job clearly communicating the upcoming changes under the ACA," he says. "They really nailed it. Kudos to CBIA for yet another inexpensive, well-run and well-organized workshop."

Compliance and Cost

Many business owners attending CBIA's ACA programs have expressed concern about whether the benefit plans they offer will comply with the new law and whether they'll be able to afford to continue providing coverage.

"If you're purchasing your employee benefit plans in the fully insured, small-group market in Connecticut, your plans will comply with the ACA, because the insurance carriers who design them are obligated by law to issue only those plans that are in compliance," says Comeau. (Connecticut has chosen to define its small-group market as employers with 50 or fewer employees. In 2016, the small-group market in all states will automatically expand to employers with up to 100 employees.)

That includes compliance with the major requirement that plans provide minimum value, that is, an actuarial value (AV) of at least 60%. AV is calculated as the percentage of total average costs for covered benefits that a plan will pay. For example, if a plan has an AV of 60%, an average consumer in a standard population could expect to be responsible for 40% of the costs of all benefits covered under the plan. All plans sold in the fully insured, small-group market will meet this requirement.

Mike Holcomb likes the sound of that. Holcomb, co-owner and CFO of electrical contracting company Lighthouse Enterprises in Cromwell, attended a recent CBIA conference, What Obamacare Means for Small Business.

"I'm comfortable with the fact that as a small employer, it seems to be easier than I thought to be ACA compliant," he said after the event. "I think the changes under the new law will mean minor changes with what we do administratively."

As an example, Holcomb cited the new cap on the waiting period before a new employee's health benefits take effect. Beginning Jan. 1, 2014, the waiting period cannot exceed 90 days; employers will no longer be able to set the activation date on the first of the month after 90 days following the date of hire.

When it comes to cost, Comeau points out to small employers that the rising cost of medical services, or medical trend, will continue to cause insurance premiums to rise. In addition, because of new rules under the ACA governing the factors insurers can use to price, or rate, health plans, costs may change for some employers and employees.

"If you employ primarily young males, your rates will probably be going up," says Comeau. "Young females will do a little better, and older people will do better. It's going to kind of be all over the board."

Sutton sees it the same way.

"Most of my clients want to know what the new regulations are going to mean in terms of cost," he says. "It's a mixed bag. I tell people it's really going to depend on the makeup of their group."

Comeau advises employers to take the changes in rating rules into consideration when determining their contribution level: the amount toward their employees' health premiums that they decide to pay.

He cites, for example, the way family composition is used as a rating factor under the ACA. The rate for a family (primary insured plus spouse and/or dependents) will no longer be determined by the age of the insured employee alone. Each family member will have a rate based on his or her age, and the rate of each family member will be added together to form the family rate. If more than three children under age 21 are enrolled, only the three oldest will be included in the rate calculation. The employee and spouse (if applicable) are always included in the calculation, even if they are under 21.

"The concept of family tier is gone," says Comeau. "Now you're building a rate based on the enrolled members of a family. So employers will need to know the ages of a new employee's dependents after he or she is hired."

50-Plus Companies

CBIA's Sept. 25 conference for larger employers featured presentations by John O'Connell, Jr., co-owner and president of the C.M. Smith Agency Inc.; Garry Straker, principal

CBIA's Mark Soycher fields member calls to the CBIA Hotline.

partner with CohnReznick; and Mark Williams, counsel with Carmody & Torrance LLP. Topics included key ACA compliance issues (Williams), ACA strategic planning (Straker), and the ACA and benefit plan innovation, design, and evolution (O'Connell).

Coming into the event, attendees were generally most concerned about getting thorough the changes brought on by the ACA with the least disruption to the benefits systems they already had in place, says Soycher.

"I think companies are saying, "This is what we've been doing, we're comfortable with it, and now there's this big looming mandate hanging over our heads, and it's going to change everything.' So when they learned that life is not necessarily going to change as dramatically as many people have said, I think they were less anxious coming out of the program. Information is valuable, and they can use it to build a framework for what they'll need to do under the ACA."

Another source of distress to attendees is the structure put into place to fund the ACA: in particular, the various new taxes and fees built into the law, says Soycher.

But he notes that they were relieved to learn that those costs would be paid initially by insurance carriers (and in some cases, self-insured companies) rather than businesses in the fully insured marketplace.

He pointed out, however, that the new taxes and fees will be reflected in higher insurance premiums for employers and employees.

They include a new annual tax on insurers; the Transition Reinsurance Program fee (intended to reimburse insurers in the individual market for claims paid to high-cost individuals); and the PCORI tax (which will fund the Patient Centered Outcomes Research Institute set up by the ACA).

CBIA Hotline Heating Up

CBIA's Jennifer Herz fields member calls.

CBIA experts have advised thousands of employers over the years through the CBIA Hotline, a free phone consulting service that enables members to get critical advice on labor and employment law; wage and hour issues; employee benefits; and environmental, tax, and other regulatory matters involving state agencies.

Soycher, who handles HR calls on everything from sexual harassment to medical marijuana, along with CBIA assistant counsel and healthcare policy specialist Jennifer Herz, have taken hundreds of hotline calls in the last few months about employer obligations under the ACA.

The two attorneys have fielded questions on a wide range of issues, including the 90-day cap on the waiting period, counting FTEs, and determining whether an employee plan meets the ACA's affordability standard.

Callers have also asked about the ACA's new nondiscrimination rules, which prohibit a company from giving its highest-paid employees a better deal on health benefits than lower-level employees are afforded. Implementation has been delayed, however, until final regulations are issued. Once that happens, the rule will go into effect the first plan year after the regulations were issued.

Other callers have raised concerns about how to handle medical loss ratio rebates. Under the ACA, insurance companies in the small-group market must apply at least 80% of premiums to healthcare coverage, with no more than 20% going to administrative costs. (For insurers in the large-group market, the ratio is 85%-15%.) If an insurer spends more than its allotted percentage on administrative costs, the excess must be returned to the plan. The question is, how much of that goes to employers and how much to employees?

"It's been confusing," says Soycher, "because employees receive a letter from the insurer notifying them that a rebate check had been issued, but the check itself goes to the employer, who then has to decide how to allocate those funds. We explain the various ways of doing that."

Soycher and Herz expect the CBIA Hotline to get hotter between now and Jan. 1, but for them, it's all part of a day's work.

"We feel a strong responsibility to be a resource for the Connecticut business community, whether it's through our own staff or through our network of outside experts," says Soycher. "Federal healthcare reform has certainly presented one of the more significant hills to climb, partly because the rules keep changing or become more clearly defined than they were originally. When changes happen, we get the message out to our members quickly."

CBIA Health Connections Ahead of the Curve

CBIA's Phil Vogel kicks off a CBIA workshop for small businesses on the Affordable Care Act.

"CBIA created the first private-sector health insurance exchange in the country," says CBIA's Phil Vogel. "In fact, the U.S. Department of Health and Human Services came to our offices in Hartford to learn about our model."

Over the last several months, Vogel and his team have been working with insurance carriers to ensure that all CBIA Health Connections plans fit within the ACA's regulatory framework. The result is a brand-new suite of competitively priced plans offered through Aetna, ConnectiCare, and UnitedHealthcare/Oxford that provide Health Connections participants with the variety of choices that has always been the hallmark of this unique program.

"CBIA Health Connections has so many different offerings," says Jamie King, employee benefits manager at Lindquist Insurance Associates in Farmington. "The plans that are offered through several carriers give people a lot of choice. You don't have to take one plan with one carrier. You can look at different options and choose what would best suit your company and each employee."

Mike Holcomb also appreciates the choice: and affordability: that CBIA Health Connections offers.

"Every year we try to do what's best for the company, and it always comes back to the fact that CBIA Health Connections provides us with the lowest increase and the most flexible options to give to the guys."

As a partner in an insurance agency that's been affiliated with Health Connections since the program was launched, Sutton sees firsthand how it benefits his clients.

"You're always able to show employers that Health Connections will help hold down or reduce their costs, and employees will still have the choice to pick the plan they want. So it works."

To make enrolling and making changes to their benefits as easy as possible for CBIA Health Connections participants, CBIA is creating the Employee Benefits Connection, a simple, friendly, powerful website that puts employees in complete control of all their benefits.

Set to launch in the first quarter of 2014, the Employee Benefits Connection will be open for business 24/7, allowing employees to log in, make elections that best suit their needs, and manage life event changes as they occur.

For employers, the Employee Benefits Connection lets them streamline their benefits administration and helps them educate their employees about benefit choices. The system is designed to do most of the heavy lifting typically associated with benefits enrollment and management: a welcome relief to benefits administrators.

Some Things Don't Change

The health insurance landscape will change in some dramatic ways on Jan. 1, but the reasons so many Connecticut employers offer health benefits to their employees are just as relevant as they ever were.

"Employers in the small-group market don't have to provide benefits today," says Comeau, "but they do. And they do it for a number of reasons that are important to their business: attracting and retaining key employees and providing the kind of work environment that they want for their small business."

In addition, he adds, employer-sponsored health benefits provide opportunities for tax advantages for employers and employees.

"Every employer's reasons for doing it might be a little different, but if it's important to you to provide a benefit plan, your reasons still apply after Jan. 1, 2014," he said.

"To stop offering a benefit plan and tell employees to go to the state exchange or directly to a carrier is going to put you at a competitive disadvantage."