Maybe it's because of the constant and overwhelming amount of information in print and on the news about the future of what has been a significant part of my livelihood for the better part of a decade, but I just can't get that old R.E.M. song, "It's the End of the World as We Know It," out of my head.

Like every other benefits manager in the country, I've been spending every waking moment trying to get my head around this 800-pound gorilla. The jungle may never be the same again.

Health care reform was designed to reduce the ever-growing number of the country's uninsured. For the most part, there was collective agreement across private, public and even party lines that the health insurance system needed some tweaking.

But with all the regulations, requirements and penalties directed at employers by the new law, I'm left a bit perplexed.

Aren't employers the good guys? American employers have voluntarily insured a majority of the population for half a century or more.

Lawmakers seemed to embrace employers' contributions early on in the debate. We all heard the president say repeatedly that Americans could keep their health plans if they liked them.

This translated to me, as a purchaser of an employer-sponsored health plan, that any reform would have to contain incentives to encourage employers to stay in the game.

I suspected post-reform employer-sponsored insurance would resemble a Medicare Part D subsidy on steroids, since the anticipated cost just to cover the nation's estimated 30 million uninsured is staggering.

Surely, the administration would see the value in spending some of those dollars to keep that estimated 60% of the population that is already covered by their employers insured.

But, other than the early retiree reimbursement program (for which we're all eagerly awaiting more details), it seems that the only financial carrots offered to employers are the hope that the individual mandate will lessen the ranks of the uninsured and that the eventual levying of an excise tax on plans that are too rich will force the purchase of less-costly health plans.

But a positive impact on the cost of health care will be far, far in the future - if at all. If reform moves forward as the new law is currently penned (despite legal challenges from a number of states), my prediction is that employers can expect additional, reform-related costs to join annual health care inflation trends in further boosting the cost of offering coverage to employees in the next several years.

For those of us with grandfathered plans, the first of the mandates must legally appear in the plans that renew after September 23.

Most of these changes are rather benign for a Florida employer like Palm Beach County, since this state is already notorious for its long list of health insurance mandates and many of the early reform-related requirements are already satisfied.

But county governments contract with other businesses. Small businesses already struggling to offer health insurance to employees will have no choice but to pass additional costs on to their customers. Every facet of the business landscape, and the associated costs of doing business, will be impacted by health care reform.

Problematic math

Although employers won't have to absorb the full brunt of the new law all at once, what really has me scratching my head is the associated math that comes with the changes effective in 2014.

The Board of County Commissioners has traditionally offered a competitive health plan for its employees, and I'm proud to have the opportunity to oversee it.

But even in a local government setting where tradition is exceptionally valued, if the cost of maintaining the tradition is four times the cost of eliminating it, elimination will have to be factually presented as an option at some point in the future.

That's not to say employers will be dropping health insurance benefits in droves. In fact, a recent poll published in "Business Insurance" magazine stated that 52.5% of executives have said they won't drop coverage and will pay the fine imposed under the health care reform law instead.

But since there appears to be nothing currently in place that will arrest the ever-climbing annual health care trend, a health plan that costs employers an average of $9,000 per employee/per year today can conservatively be expected to inflate to as much as $11,000 PE/PY by 2014.

If the health reform law stays intact and goes into full force in 2014 as currently written, employers will be compelled to examine the differential between the cost of offering coverage and the penalty for not offering it.

A midsized employer like Palm Beach County, for example, with roughly 5,000 insured employees, could face an annual cost of $60,000,000 for its 2014 health plan.

But by comparison, the penalty for not offering coverage would be pretty close to $10,000,000. This, of course, is a simplified calculation, and there will be other considerations such as health insurance-related employer tax breaks to consider.

But savings aside, could employers that have traditionally filled the role of insurer in the lives of employees and their families really walk away from covering them?

Certainly, employers that dare to brave such uncharted waters will inevitably face demands for raises by their employees since employers have long touted health benefits as part of an employee's overall compensation package. But annual raises are much easier to predict and control than medical inflation.

Regardless of what the future holds, we find ourselves in a drastically changing environment. Our roles have never been more essential as we lead the way through the weedy jungle of health care reform.

Contributing Editor Nancy L. Bolton is the director of risk management for the Palm Beach County Board of County Commissioners in West Palm Beach, Fla.

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