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Assess the Future Costs of the New Healthcare Law Now, In-House Counsel Told

The healthcare reform program signed into law six months ago by President Obama will have the broadest impact on the nation of any legislation since the Social Security Act, so employers should start now to prepare for the changes affecting them.

That was the message Fisher & Philips Partner Sheldon Blumling delivered to an audience of in-house counsel at the InsideCounsel/Fisher & Phillips National Labor Law Symposium Thursday in Chicago.

The complexity of the law makes that a significant challenge, he added, and many provisions remain to be clarified through regulation.

"We already have 1,000 pages of regulatory guidance," he said, "and by the time it's all said and done, there will be 10,000 pages of them."

One hundred pages of the issued regulations deal with what is required for employers to keep a "grandfathered plan," which is not subject to many of the requirements that will be imposed on new healthcare plans. For example, for new plans an employer cannot offer better benefits for executives or highly compensated employees than are available to other employees.

While many companies want to retain the ability to offer different levels of benefits to different groups, "Employers will see that it is very difficult to maintain a grandfathered plan," he said. For example, in order to be grandfathered, an employer can't change insurance carriers, and premiums for employees can't rise more than 5 percent.

Starting in 2014, companies with more than 50 full time employees will face the "play or pay" provisions of the law- either provide adequate and affordable healthcare coverage, or pay a penalty of $2,000 per employee, excluding the first 30 employees.

"It's staggering to see how much it will cost, particularly if you currently don't have coverage for employees or have coverage but don't subsidize it," Blumling said. "If you haven't crunched the numbers, I encourage you to do so. You have a decision to make."

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