Detroit Janitorial & Cleaning Services Blog

Obamacare Delays Might Spell Cost Savings For Facilities Managers

Posted by Chris Stathakis on Thu, Jul 11, 2013 @ 03:58 PM


Recent Changes to the Employer Mandate of ObamaCare Put Off Until 2015

With less than six months to go before the January 1, 2014 deadline, the White House announced on Tuesday July 2nd that a key requirement—the employer health insurance mandate—will be deferred until 2015. You can view the full the U.S. Department of Treasury statement here. Getting a clear and accurate picture of how businesses are going to be impacted by the Affordable Care Act, also known as Obamacare, has been a little like the wild, wild west. First, some report it’s never going to happen. Then others come out guns blazing and predict the total destruction of small to medium sized businesses. The reality is many businesses are running around trying to figure out what it all means, how to insure they are compliant, keep their costs in line and stay competitive. With a complex health care market, intense political opposition and a lack of clarity in how employers must participate, doubts have emerged as to how this massive set of new laws and regulations will be implemented.

Small Businesses Get More Time to Access Health Care Options & Compliance Issues

Well, breath a little sigh of relief because the employer mandate of the Affordable Care Act has been delayed for another year. Amidst the confusion the government has decided to take the necessary time to clarify how businesses must comply with the new health care coverage requirements. The Employer Mandate, which was to become effective January 1, 2014, compelled large employers to offer health care coverage to all full-time employees or pay penalties. The year delay means that promised penalties for failure to provide health insurance coverage will not be enforced for another year.

Small businesses scrambling to gauge the costs of compliance and how they must absorb or pass these added costs along to customers have another year to determine the best course of action. What does that mean for Facilities Managers? It means their Janitorial Service Providers will not be required to provide health care for employees working in their building until January 1st of 2015. Likewise, it is unlikely that increased health care costs will lead to increased cost of janitorial services for you as a Facilities Manager.

Health Care Facilities Budget resized 600Why ObamaCare Is Proving to Be So Challenging For Businesses

The Affordable Care Act has the expansion of insurance as its primary objective and relies on multiple programs and regulations to achieve it. To assist the poor in getting coverage, Obamacare pursued the expansion of Medicaid, individual subsidies for people purchasing insurance, opportunities for small businesses to shop for affordable health plans and mandates for larger businesses (50 plus full-time employees) to offer insurance or pay a fine of at least $2,000 per employee.The employer provisions of Obamacare have proven problematic. In March the Secretary of Health delayed a requirement a small business provision and now they are postponing the requirement that big companies must provide insurance or face steep penalties.

Many small to medium sized businesses scrambled to determine whether they needed to comply with the law’s requirement to cover all full-time employees, defined as those working 30 hours or more each week. Understanding the technical requirements of the law and coming up with a plan to implement the mandate has proved overwhelming to many businesses. Employers from all over the country have raised grave concerns about the Employer Mandate’s effect on their businesses. Most businesses have voiced concerns over the financial burden of offering coverage to their full time employees.

The new mandate was never just about insuring people, there is the cost of tracking employee hours, evaluating strategies to minimize costs and creating systems to keep track of all of that information. How do you track employees with varying schedules from one week to the next? And many companies offered that they may have no choice but to replace full-time workers with part-timers to avoid the burdensome costs of Obamacare’s reporting requirements and penalties. As the deadline has drawn closer, many business owners have lost sleep over what the mandate will mean for their businesses and their employees. So understandably, the year reprieve of the Employer Mandate is a welcome respite. The scope of the delay is yet to be fully determined, but formal guidance related to the postponement is expected within the next week.

Stathakis Is Working Hard to Keep Customers Informed & Minimize the Impact of Increased Costs

In an effort to keep our customers informed and minimize the impact of increased costs associated with Obamacare, Stathakis has worked hard to better understand The Affordable Healthcare Act. Our management team has attended numerous seminars, hired private consultants and worked with various health care Insurance Professionals which getting increasingly confusing and often conflicting information. 

So it is only right that our biggest concern here at Stathakis is clearly communicating to our customers how they will be impacted by the Affordable Care Act in a timely fashion so they can plan accordingly when doing their annual budgets. At the rate information has been coming out from the Federal Government, we just have not felt like we could of given our customers good numbers with regard to the Obamacare impact in time for their 2014 budget process. So in that regard alone, we are happy and yes, even a bit relieved that the Act has been delayed another year.

We here at Stathakis will continue to stay informed and try to pass along the most current information to our customers and building services managers all over as we weather the storm of such sweeping new regulations. Likewise, outsourcing your building maintenance continues to be a viable and cost-saving measure, even more so now that we can factor costs for next year without health care changes looming.

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Tags: Cleaning Industry Updates, Cost Saving - Pricing, Customer Focus

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