Monday, May 3, 2010

Health Care Reform:More Risk to the Balance sheet

Up until now, employers concerned themselves with the insurance risks that would impact their corporation's balance sheet. Risks like group health, worker's compensation, general liability, etc. Now, with Health Care Reform, the significant regulatory developments in human resources, benefits, and compensation, pose new risks to the balance sheet; RETURN on human capital.

Programs and insights on how to increase human capital will be paramount, particularly as the economy rebounds and corporations position themselves to compete. If an employer doesn't strategically position themselves to get a return on their human capital, they will be left behind by their competition, as the world is getting flatter as I type.

The Patient Protection and Affordable Care Act signed into law on March 23, 2010 and the Health Care and Education Reconciliation Act of 2010, make material changes to existing law which governs employer-sponsored group health plans, individual health coverage, and government health programs. This reform is not final, as there are still unanswered questions regarding certain provisions, and there will be additional interpretations and guidance on this reform's implications. Regardless of the clarity expected in the coming months, please know that this reform will be a "game changer" in the management of any company's balance sheet.

Reform of health care needed to happen, I don't argue that. My point is, unless the proper venue, people solutions, and content of communication to the employee workforce regarding their health care options are established, an employer's greatest asset will be greatly diminished. Until now, corporations large and small defined their employee's worth by the benefits they offered. What will they do now?

Further, strategies need to be employed to reduce the health risks of an organization's human capital. Beginning September of this year and on into 2018, certain cost containment mechanisms must be removed, as a result of reform legislation recently passed. One such example would be that health plans may not impose any lifetime maximums or annual limits on the dollar value of benefits.

Gone are the days of an employer asking for the return on investment (ROI) for wellness/health and productivity initiatives. The price tag for health care reform will be enough for the financial folks in an organization to realize the ROI for their own company. No longer will corporations be able to "put off" initiatives that will change employees and their dependent's behavior for better health. It will have to take place yesterday.

I guess the fun has just begun?!