Health Care Reform Bills Would Hit ARM Firms as Businesses, Rather than as Collectors

Health care reform bills introduced this week by House and Senate committees could impact some debt buyers and collection agencies that don’t offer health insurance or have insurance plans that might be deemed too skimpy. The new proposals would require businesses to provide coverage to workers.

So far, however, ACA International says it is hopeful that the health care reform legislation won’t negatively affect how hospitals and health care providers do business with ARM professionals.

“ACA is cautiously optimistic that the fundamental business operations of health care providers will remain intact in the near term,” Adam Peterman, ACA’s director of federal government affairs, told insideARM.

Hospitals and receivables management executives are scoring the more than 1000-page House bill that could change the way they do business.  Under the America’s Affordable Health Choices Act introduced Tuesday in Congress, employers may provide health insurance coverage for their workers or contribute funds on their behalf to a public plan. Employers with annual payrolls above $400,000 who choose to contribute to a fund instead of offer coverage will pay an amount based on 8 percent of their payroll.

To help small employers, firms with payrolls of $250,000 or less will be exempt from providing coverage. But employers with payrolls between $250,000 and $400,000 that do not provide health coverage would face a penalty starting at two percent of total payroll and rise to eight percent. A new small business tax credit will be available for companies that want to provide health coverage to their workers.  Also, employers that offer coverage will have to meet minimum benefit and contribution requirements.

Jim Richards, chief executive of Capio Partners, a debt purchasing and collections firm, told insideARM that he doesn’t foresee any adverse impact to his 18-month old business from legislation requiring employers to provide health care coverage.  Like many other companies Richards has owned, Capio Partners has offered health coverage since its origin.  Richards said it makes competitive sense for the Atlanta-based company to offer health coverage and it helps attracts better employees.

“I think it’s the right thing to do as a business.  Also, it’s a good thing because people get coverage.  That’s a side benefit,” Richards said.

Still, Richards said he doesn’t believe that the government should require employers to provide health coverage. He supports a mandate that individuals get their own policy or enroll in their employer-sponsored plan, adding that employers’ health coverage costs would decrease if young people and healthy people who can afford coverage but choose not to get it are required to.  

“When you insure the young, you get a better pool (of insured workers).  The people electing not to have coverage, those are great people to add to your (insurance) pool,” he said.  

Richards, a 36-year industry veteran, said he believes most ARM firms with 25 or more employees offer coverage. insideARM, however, was not able to obtain statistics on the percentage of ARM firms offering health coverage.

ACA president Jay Gonsalves told insideARM that most of his organization's membership provides health care coverage.  But he's concerned that minimum coverage standards could burden employers. "As a consumer and business person I have some concerns about any such ambiguous government program," he said.

Meanwhile, Peterman said recently introduced legislation does address the most critical issues of non-profit providers and their business activities, but threats remain to the medical ARM business because the Senate Finance Committee, which has yet to unveil its bill, could seek to change eligibility rules for hospitals’ tax-exempt status and how soon they can outsource receivables work.

“We need to see what the Senate Finance Committee produces, as the issues most critical to the industry may still surface in that legislation,” he said. “ACA continues to work closely with the relevant Congressional committees and members, as well as provider groups, to ensure the business activities of our nation’s health care providers are not unduly hampered by excess regulation.”