By MATT CHANDLER
mchandler@bizjournals.com | 716-541-1654

The good news for businesses grappling with the cumbersome new health-care regulations: Things may be getting better.

After an initial year where panic set in, lawsuits were filed and expectations were murky, year two has been more business-as-usual as companies adapt to life under the new rules.

Still, with regulations being phased in over the next few years, what are concerns of business owners? And what should they be looking for in the year ahead?

Kate Ulrich Saracene, labor and employment counsel and a member of the health-care reform team at Nixon Peabody, discusssed what she is seeing and hearing from clients and where she expects things to go in 2012.

Are you seeing a rise in the number of small businesses seeking legal advice to understand the regulations and ensure compliance?

Ulrich Saracene: In general, the smaller businesses are fully insured. They are buying their policies and the insurance carriers are taking care of a lot of the compliance issues for them. What I am finding is that there are a lot of other areas outside the policy itself where the small employers need help. The people who are filling in the gaps there right now (is) the broker community. More and more insurance brokers are starting to open up consulting branches that are separate entities to keep an eye on these other issues for the small employers.

What types of issues are they looking at?

Ulrich Saracene: For example, making sure that the dependents of employees who are eligible for coverage comply with the health-reform rules. You have to cover children up to age 26. Also, a big one is keeping an eye out for discrimination issues. There is a non-discrimination requirement that hasn't gone into effect yet, but it has opened up everybody's eyes to the fact that a lot of employers had discriminatory eligibility criteria.

What were some common examples of those types of discrimination?

Ulrich Saracene: Well, a manager might have a more generous health plan than non-managers or executives would be getting higher contributions toward the cost of their health insurance than hourly staff. These sorts of practices are probably going to all be illegal when the non-discrimination requirements come out. So the brokers have been helping small companies restructure their rules to comply.

Even with the brokers, are there still legal issues that make it to your desk in the wake of the regulations?

Ulrich Saracene: Sure. The area I am seeing more legal advice is needed is when an issue gets really complicated and the brokers aren't sure how to advise people. They don't want to be in the market of giving legal advice, so at a certain point they will pass people along and tell them they really need to talk to a lawyer. Other times they may not like what they are hearing from their broker and they may reach out for a second opinion from a lawyer.

After year one, with so much uncertainty, what have things been like for your clients and prospective clients? Are they coming to terms with the legislation and are things settling down?

Ulrich Saracene: It has been a quiet year for health reform. There was a whole slew of changes that went into effect in the first year, but this year there were almost no new changes, so things have definitely settled down.

What about 2012? What should business owners prepare for in terms of the health-care regs?

Ulrich Saracene: The big requirement that is going to be coming out is the four-page summary of benefits.

Every health insurance plan has to fit all of its provisions into a four-page summary now. I think it is going to be hard for the plans that don't buy insurance because they are going to have to write their own summaries.

There is also an excise tax that is coming in 2012 - both on insured and self-insured plans - which was kind of hidden in the statute.

Nobody I know even noticed it until a couple months ago, but I believe it is $2 per person in the first year and then $1 per covered person for the next six years. Every employer who offers health insurance is now going to be paying an excise tax from 2012 through 2019.

Once that goes into effect, you will definitely be hearing some noise about it.