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32 PalletCentral July-August 2014 Health Care CHANGES RAISE QUESTIONS By Esme Neely Smith here is one certainty about implementing the Affordable Care Act – there is confusion all around. Headlines since last October have been dominated by the problems with federal and state health exchange websites for individuals applying for the new healthcare coverage. Seldom highlighted are the issues that businesses of all sizes are facing as they try to adapt to the law's still-in- progress rulebook. Businesses, depending upon the number of employees, have faced a series of moving deadlines to bring existing healthcare polices in line with the benefits requirements mandated by ACA, or Obamacare. The latest twist came in May as the government set a new compliance deadline for small firms – October 2016. However, firms with 100 or more employees need to start providing health benefits to at least 70 percent of their workforce by 2015 and 95 percent by 2016. The bulk of the membership of the National Wooden Pallet & Container Association fall into the "medium-size" business category and face a January 1 deadline to offer policies compliant with the Obamacare mandates. It may be regional differences, but the experiences of two pallet manufacturers with Obamacare and the projected impacts are strikingly different. Conner Industries An industrial lumber remanufacturer based in Fort Worth, Texas, Conner Industries employs more than 500 people at 12 plants in eight states. There are fewer than 50 employees per site. It operates primarily in states that have been less receptive to ACA and the expansion of state Medicaid programs for the uninsured. Conner CEO and owner, Grady Payne, testified before Congress in July 2011 looking down the road at what he viewed as the adverse impacts the Affordable Care Act would have on mid-size employers like his firm. In a recent conversation with PalletCentral, Payne believes his predictions have come true. Conner switched from a Blue Cross policy to a self-insured plan. The company continues to pay 55 percent of employee premiums. "We have had to give up our medical plans and go to a self-insured policy with reduced coverage in order for us to be set up to comply with the deadline for the law," Payne said. Conner turned to a third-party administrator to find a qualified policy and it decided to go the self-insured route because the premiums would only be 10 percent more than before. Payne said even though the firm had a "below average" claim year, Blue Cross would have hiked the premium by 30 percent. Even with the consultant, he said, few insurers were interested in providing Conner with a quote. "Much of the administrative cost is already starting as the IRS is continually issuing new and expanded information and reporting demands," he said. "These 'rules' are so complex we are having to pay consultants and legal fees to interpret and comply with the ridiculous demands. There seems to be no stop. We struggle in our planning, as what is good for our employees and their families and what we do to comply with the mandates, seem to work against each other. "Most, if not all, of our employees will be impacted in a negative way reducing their ultimate disposable income which will impact our economy," he said. The employees are paying higher out-of-pocket expenses under the new policy. Under the law, Conner will need to be in compliance on January 1. The firm is still trying to assess the true costs of the law, Payne said. "We have stayed involved with this law since its beginning and still today, just seven months from full effect on us, we do not know the type policy required or the cost. The range in cost is from very high to catastrophic. "One thing for sure is any expansion or job growth will have to be considered in a much more significant way. The added cost to start up a new operation may make the project unfeasible. We will and have already started outsourcing temporary labor for new projects and seasonal demands; T BUSINESS

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