LAS VEGAS—Hotels are feeling the effects of President Obama’s Affordable Care Act health-care reform plan.
Human resources officials said during the Latino Hotel Association’s 2011 International Conference & Expo last month in Las Vegas that premiums are on the increase as the health-care reform measure is being rolled out.
Panelists indicated premiums increased by 3% in 2011, an increase they blamed on the new regulations with which hotels must comply.
The reform “has thrown a monkey wrench into the administration of benefits,” Stacey Nash, HR executive at Heritage Hotels said during a general session panel at the Tropicana Las Vegas.
Read “Hoteliers should assume health-care changes.”
John Foley, senior VP of domestic markets with Pan-American Life Insurance Group, said the increases in 2011 were related to dependents staying on their parents’ health-care plans longer, up to age 26, as is now allowed by the reform.
Employee benefits consultant at insurance and financial services firm USI Southwest Eric Hirschler said the premium increase Nash noted at Heritage is not out of the ordinary.
“We did see that all the national carriers used reform as an excuse to raise premiums by 3 to 4%,” he said.
Hirschler advised the hoteliers in the audience to “push back” against these increases by the national carriers. “Don’t let them use that as an excuse,” he said.
Nash said her company is weighing whether it might be more cost-effective to not comply with the reform and pay a penalty instead of being in compliance and pay higher health-care costs.
The gut reaction for most companies, Hirschler said, is that it’s a “no-brainer” to pay the penalty if the cost of compliance is five times higher than the penalty being charged for not being compliant.
That might not be the wisest course of action, he said. The government likely is to close off that loophole and increase penalties for non-compliance, not to mention valued employees might leave if they are not offered health-care coverage.
Employee feedback
Employees increasingly are voicing their concerns over the new health-care measure, the HR officials at the panel said.
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“People are taking more of an active role in their health care,” Nash said, adding that she has fielded questions regarding lifetime limits for health-care spend, as well as questions regarding the difference between emergency room and urgent care.
Nash said it’s a good thing for her company when employees ask these questions. “That helps the company’s bottom line and makes for an educated health-care consumer,” she said.
Companies should ensure employees know where to look for lower-cost care within the plan’s network, Hirschler said.
“They just tend to take the doctor’s word as gospel,” he said.
A quiet 2012
The new year should be a quiet one as it relates to compliance with the health-care regulations, the panelists agreed. Most of the changes that needed to take place happened during 2011.
“2012 is mostly about getting our arms around a multi-year (health-care) strategy,” Foley said of hotel owners’ likely attitudes toward health care next year.
One item that hotels should keep on their 2012 action plan, however, is to continue to educate employees about their health-care options, the panelists said.
Hotels also need to be diligent about keeping health-care costs down, Hirschler said. “We really have to look at things with a fine-tooth comb,” he said.
The in the long term, hotels need to keep an eye on the end of limits on out-of-pocket expenses, which goes into effect in 2014, Foley said.
That will be “devastating” to hotels when it is enacted, Foley said, because most plans are built for co-sharing costs once the out-of-pocket limit is reached.
Elimination of the out-of-pocket expenses limit will “lead to unwise decisions,” Foley said.
