When Trump tweets, benefit advisers' phones ring - here's what clients want to know

Columbus Business First, February 17, 2017

As an employee benefits adviser, Christina King keeps a close eye on the internet and social media for the latest policy pronouncements from President Donald Trump.

"It's a matter of wait for the tweet and see what's going to happen next," said the founder and president of C&A Benefits Group and Business Services in Dublin. "When something is reported on the news, I walk in the office and my phones start ringing. I'm just trying to get as much accurate information as possible."

But King and others in the business of advising companies on health insurance and other employee benefits issues haven't had many firm answers to their clients' questions during Trump's first month in the White House. While the president has made it clear that big changes are coming on the Affordable Care Act and other laws and regulations he sees as running counter to the interests of American businesses and the economy, his approach to making those changes remains a work in progress.

That leaves businesses in a lurch as they try to ensure their benefits and health insurance programs comply with federal laws and regulations and as they budget for the rest of this year and 2018.

"Generally a tone is being set that for every new regulation, two will be removed," said Tom Paplaczyk, managing partner at Strategic Business Services Agency in Worthington. "This will definitely affect Main Street employers at some point."

Overtime rules in the air

While the repair or replacement of the Affordable Care Act is the elephant in the room, some other regulations are in line for big changes as well.

King said that includes an Obama-backed change in overtime pay rules for white-collar, salaried employees that held the attention of many of her clients last year. In May, the U.S. Department of Labor announced the income threshold for overtime for those employees, previously $23,000 a year, would rise to more than $47,000 on Dec. 1.

The Trump administration has said it will scrap the higher threshold. The change has been on hold since a federal judge issued a preliminary injunction in November to block its implementation.

"Now we're in this unknown," said Jason Rothman, who advises clients on employee benefits and executive compensation as a managing consultant at Findley Davies, a human resources consulting firm with an office in Columbus.

But he said the Trump administration has been clear on its intention to throw out an Obama-backed change that requires advisers on retirement accounts to work in the best interests of their clients. Rothman said the new "fiduciary rule," set to take effect in April, would apply to advisers to company retirement plans and individual investors.

Rothman said it is also likely the new administration will make changes to expand health savings accounts, including higher caps on contributions that consumers make to their accounts to pay for medical expenses. He also anticipates a revival of health reimbursement agreements in which employers give money to employees on a tax-favored basis to pay for health-care costs such as copays, prescriptions and vision services.

Affordable Care issues

Also on the human resources front, King said some of her clients in the tech industry are concerned Trump's immigration restrictions will hurt efforts to find skilled workers in a tight labor market. But the biggest issue, she said, is what will happen with Obamacare.

"A lot of it is wait-and-see," King said, adding much of the uncertainly centers on the individual insurance market, where many of her clients saw their premiums rise 25 percent to 50 percent this year.

King, Paplaczyk and Mercer's Chrissy Knott said an offshoot of problems with the Affordable Care Act has been the growth of self-funded health plans for small businesses.

In these "level-funded" plans, employers pay a set amount each month to a health insurance carrier or third-party administrator to cover administrative costs, fees and embedded stop-loss insurance for catastrophic claims. If claims are less than the funded amount at the end of the year, a rebate or credit is issued to the employer.

It's not clear if the plans will be an important part of Trump's health-care reform platform, but Paplaczyk hopes such innovations will drive what's to come seven years after Obamacare was enacted.

Knott, health and benefits practice leader and principal at Mercer's Columbus office, said her clients' top concerns are rapidly rising prescription drug costs and the so-called "Cadillac tax" on high-cost health plans that is scheduled to go into effect in 2018.

Mercer's clients also want to see the Affordable Care Act reporting requirements go away and an expansion of health savings accounts.

"But employers need to remember that until the laws are changed with an effective date of change," Knott said, "the current ACA is the law of land and employers must remain in compliance."

Tom Wagoner, president of USI Columbus Employee Benefit Division (formerly Accelerated Benefits), said the changes coming from what he called "Trumpcare" will have the most impact on people with individual coverage, not those in group plans.

He said to look for the White House and Congress to retain popular Obamacare provisions such as young adults being covered under their parents' insurance until age 26, insurers not being allowed to deny or limit coverage for people with pre-existing medical conditions, and guaranteed issue of policies regardless of health status or age.

Wagoner also sees a move toward health plans that provide catastrophic coverage but reduce the free preventative-care and wellness features that some say have driven up insurance premiums under the Affordable Care Act.

"But no one has a crystal ball" said Wagoner, who has been advising clients on insurance and employee benefits for more than 30 years. "There's nothing strategically you can do now to prepare for this. You'll just have to adapt when the time comes."

Jeff Bell is a freelance writer.