Posted: August 01, 2012
Obama’s health care act upheld
Employers urged to explore optionsDebra Melani
"A significant number of states chose not to proceed with health insurance exchanges, expecting the law would be thrown out, so they’ve done nothing," Lindsay said. States that do not have a fully operational exchange by deadline (January 2014) must take part in a federally run exchange. "So you have an irony. States that didn’t like Obamacare now will be forced to be under the federal purview."
Because of Colorado’s quick action, Fontneau and her team received more than $17 million in federal grants to help set up the exchange.
The exchange has many positives, Lindsay said: Employees will have more choices in plans; it will remove the administrative burden from employers; and it will provide consumers more easily understood information. "But there is nothing, zero, nada, associated with exchanges that guarantees the rates will decrease. They think the exchanges are going to magically save money. I think that’s a ludicrous and, by the way, completely untested, theory."
In fact, Lindsay predicted costs will be as much as 30 percent higher, just given that most employees and employers pay health insurance with pre-tax dollars, and exchange plans are bought with post-tax dollars, he said. Fontneau’s staff, however, said SHOP consumers will have pre-tax and post-tax options.
"I think the concept behind it is that if you provide transparency and additional information to our consumers," Fontneau said, "that our consumers are going to make better and more informed choices, and the spirit of an open marketplace will drive down costs over time." One of the ACA-mandated changes already in effect, which has led to coverage for more than 43,000 young Coloradans since it took hold, allows dependents up to age 26 to remain on their parents health plans.
"That does affect the exchange," Fontneau said. "We want as many young and healthy people in the exchange as we can get." Many industry experts say the upholding of the individual mandate, requiring all legal Americans to be insured, was a boon for exchanges and critical to Obama’s reform success for the same reason: The bigger the pool, the lower the risk; the lower the risk, the lower the cost.
Gagliardi, whose NFIB joined the lawsuit challenging the constitutionality of the ACA mandate, balked at the notion it would lead to lower costs. "Simply enlarging a pool does not lower costs. If you enlarge that pool with sicker people, you increase costs. And with guaranteed issue (another ACA mandate forbidding insurance companies from denying anyone coverage, regardless of medical issues), that’s what’s likely to happen," Gagliardi said, predicting many healthy people will refuse coverage and pay the penalty, until they get sick. "Then they have to be offered insurance."
The Obama administration says that by pooling together, small businesses in the exchange will benefit from insurance with lower administrative costs. And limits on insurance rating, such as on health status and gender, will also lower premiums, it contends.
Regardless of cost, Gagliardi, active in the exchange planning, said he and others are working to assure what’s best for small business owners, who will face many choices in 2014 that they can start considering now. "I think some businesses will find it easier to navigate with their broker, and we are adamantly insisting that if you are using a broker today, you should be allowed to use that same broker, even if you go into the exchange."
All plans offered in the exchange must be offered outside of the virtual marketplace, so business owners need to decide which direction they will take. "Even with Obamacare, businesses are not forced to use the exchange, and that is their right, and we will fight to the end for that right," Gagliardi said.
Deibel echoed what seems to be a consensus: Business owners should stay abreast of changes and involved in planning when possible (all exchange planning is open to the public, and planners are in the midst of critical decisions right now), rather than sitting back and hoping it all goes away.
"I think, as business owners, we need to keep an eye open to our options," Deibel said. The concept of the exchange makes logical sense on the surface, especially for small businesses, which can benefit by participation in a pool, he said. The reality, Deibel said, is something has to change. "We have the highest cost of care in the industrialized world, but far from the best status of health-care outcomes."
Riesberg said business owners not only should stay apprised; they have an obligation to become informed. "This is a recruiting tool; some employers use it to retain people. They have a real responsibility to know enough to be asking the crucial questions and to be sure they are getting the right input."
New rules affecting business owners for the upcoming renewal period include:
• A fee assessed against every employer to cover the cost of comparative value studies on the effectiveness and outcomes of medical treatments, starting at $1 per covered life (including spouses and dependents).
• A $2,500 maximum placed on employees’ medical flexible spending accounts.
Of note: Reduces employees’ backup option for other frequently lacking benefits, such as vision or dental.
• A 3.8 percent tax on investment income
for individuals making more than $200,000
a year and couples earning more than $250,000 annually.
• A 2.3 percent tax on medical device makers (such as artificial hips, pacemakers, etc.).
Of note: Increase likely to be passed along to patients.
• A required 60-day advanced-notice of any health-insurance policy changes.
Of note: Most employers do not receive notice of rate hikes in time to make adjustments and meet the 60-day notice requirement; therefore, they will have to absorb the cost until the notice rule is met.
• A payroll requirement for companies of 250 or more to show the value of health benefit plans on employees’ W-2 forms.
• A requirement to provide a full summary of benefits to each employee.
Source: Lockton Employee Benefits Group
HEALTH REFORM RESOURCES
Kaiser Family Foundation
Colorado State Government
Colorado Department of
(click on Division of Insurance)
Colorado Health Benefit Exchange