Health care reform: What will change?

This week’s historic passage of sweeping national health care reform legislation has many concerned about what changes are coming as a result.

Most of the provisions of health care reform, like making mandatory the purchase of health insurance by individuals and making businesses that employ more than 50 people offer a health insurance option to their employees, don’t take effect until Jan. 1, 2014.

However, tanning bed operators will begin feeling the pinch of the legislation this summer. A federal 10 percent tax on tanning beds and the like begins July 1.

Robert Craft, owner of Celebrity Video and Tan in Alabaster, said he does not think the new tax will stop his clients from using his service, but he does expect it to harm his bottom line.

“It’s going to hurt. We operate on maybe a 10 percent profit margin, so it’s really going to cut into that,” he said.

Tanning, which is considered a service, is not subject to Alabama sales taxes, though most of Craft’s clients don’t realize that, he said.

“My customers think it’s taxed right now. When we tell them the price, they ask, ‘Isn’t there sales tax?’ Our tanning packages are so inexpensive, the 10 percent tax won’t stop customers. That’s only like $1.50 more on our package of 100 minutes.”

However, the tanning tax will mean Craft has to keep up with the revenue he brings in through the tanning portion of his business for accounting purposes, something he doesn’t separate out now.

“My biggest complaint is that because we are a smaller industry, we didn’t have the money to fight this. The Botox industry had more money, so they fought it and they took it out of health care reform,” Craft said.

“Our industry is already subject to a lot of scrutiny. What I think is they are going to find some way to charge higher insurance rates for people depending on how they take care of themselves. They say tanning is bad, so I think they are going to find a way to charge higher rates for people who tan. It’s a way for them to stomp out tanning,” he said.

Making health insurance mandatory for individuals means many employers will see an increase in the number of employees taking part in coverage offered by the employer’s plan, said Gene Holder, chief financial officer at Central State Bank.

Holder has been studying what health care reform will mean for that business.

With increased participation by employees come increased costs for the employer, he said.

Central State Bank employs about 50 people. About 60 percent of those employees participate in the bank-sponsored health insurance. About 20 employees do not.

“Our current procedure is we pay half of the employee’s health insurance premium and the employee pays the other half,” Holder said.

Some of the 20 or so employees who do not participate in the Central State Bank offered insurance are covered under a spouse’s health insurance plan. However, many of those employees simply choose not to purchase it, Holder said, and are not covered by health insurance.

“Once it becomes mandatory for everyone to have health insurance, we’re going to have more employees participate in our plan. Because we pay for half of the premium cost, the hard dollar cost is that we could be paying for another 20 people.

“We have tried to keep our health insurance costs down as low as we can, not only for our business, but for our employees. We’ve seen tremendously escalating costs over the last decade. In some cases, we have looked at reducing coverage to try to keep premiums where employees can afford them,” Holder said.

Family health insurance coverage for an employee at Central State Bank costs a total of $1,000 per month — $500 of that provided by Central State and $500 by the employee.

“If we add another 20 people to our family coverage under our current plan, that’s an increase in our cost of $10,000 a month or $120,000 a year,” Holder said. “When it comes to hiring additional people or expanding our staff, we will really question that. That’s that much less we have to pay out in salaries.”

Because most of the health care reform legislation doesn’t take effect until 2014, the acting executive director at the Community of Hope Health Clinic doesn’t expect to see many changes from it.

Community of Hope Health Clinic is a non-profit, free health clinic whose mission is to serve uninsured residents of Shelby County. The clinic is staffed with volunteer medical and non-medical personnel. It is open only one night per week — Thursdays — from 5:30 to 8:30 p.m. and is located at the Shelby County Health Department in Pelham.

“My opinion is, there will always be a need for health care for uninsured adults,” said Chris Monceret, acting director at the clinic. “They say we all must have a driver’s license and auto insurance, and we see how that’s worked out.”

Monceret said right now the clinic has a desperate need for volunteers.

“We need physicians, nurses, social workers, receptionists, chaplains and interpreters,” she said.

A volunteer training session is set for April 15 beginning at 6 p.m. at the health department in Pelham. For more information about volunteering or attending the training session, contact Monceret at chris.monceret@adph.state.al.us or 205-685-4154.