An alarmingly low number of corporations are prepared for compliance with the Patient Protection and Affordable Care Act (PPACA), which largely came into effect on January 1.
A mere 25 percent of corporate decision makers that responded to a recent survey said they had not yet begun preparing to comply with PPACA. Just more than two-thirds (67 percent) of respondents are either “not very familiar” or are “somewhat familiar” with the requirement for the law.
The survey by Nielsen Research, released and sponsored by Travelers, polled more than 800 corporate decision makers about their familiarity with and preparedness for the act.
The risks associated with implementing the PPACA may be greater in number and severity than many companies realize, including penalties, regulatory actions, lawsuits, and the ensuing reputational harm for failing to comply with the act.
While most of the provisions of the act went into effect on January 1, 2014, some aspects of compliance have been delayed until 2015.
The PPACA’s main goal is to increase the quality and affordability of health insurance. It introduced a number of mechanisms—including mandates, subsidies, and insurance exchanges—meant to increase coverage and affordability.
“Most of the public attention around healthcare reform has focused on the new health insurance coverage mandates – giving employers very little information and context for the additional liability exposures the PPACA creates for them if they are not in compliance,” Jeffrey Klenk, senior vice president, management liability, Travelers bond & financial products said about the Neilsen survey.
Those that say they are “extremely familiar” with the PPACA (one third of respondents) are three times more likely to be concerned about the possibility of lawsuits stemming from non-compliance.
An area the employers have seemingly given little consideration to is the potential threat of whistleblowing. Almost half of those surveyed (47 percent) say they “are not very familiar” with whistleblower protections that would be provided to employees that report violations.
Even though many employers are missing some key areas of knowledge, more than half (55 percent) will not seek advice from outside resources such as an independent agent or outside legal counsel.
Among the insurance products available to provide protection around the new and emerging PPACA risks are fiduciary liability coverage, directors and officers liability coverage and employment practices liability coverage.
Patricia O’Connell writes for the Advisen Risk Network. She has more than 15 years of experience writing about a variety of business subjects, including strategy, the C-Suite, and management. She is the former news editor at Businessweek.com, where she oversaw coverage for the daily web site.
