Affordable Care Act Employer Mandate Update

Wow, can you believe the news that the employer mandate portion of the ACA has been delayed for 12 months until 2015?

Let me start with explaining what the employer mandate is, and then follow up with the ramifications of such a move.

The employer mandate was to affect those companies with more than 50 full time employees. If they did not offer their employees coverage, they were to face a penalty starting in 2014. This has now been delayed to 2015.

This in itself was only a minor portion of the overall ACA and would have affected only between 1-4% of the population. The figures vary depending upon the source. Most large employers already offer health benefits to their employees. That is why the number of folks affected is relatively small.

However, the ramifications of this could be far reaching and we will have to see what the unintended consequences of such a move might be.

Some commentators see this as the first major sign that the entire ACA program will collapse in the first few years. I personally do not see it that way. I believe the ACA will be a huge success as long as the government subsidizes the premiums with tax dollars. When they start to scale back the flow of Federal dollars into the program at that time we shall have to wait and see where the program will head.

Here on the Peninsula I do not see this affecting many people, as I had mentioned earlier, most companies with that many employee’s already offer coverage.

One of the unintended consequences of this delay could be to provide companies with an opportunity to drop employer coverage for at least a one year time period and thereby force their employees into Exchange programs. Let me give you an example. If you were a large fast food company where the vast majority of your employees were younger, under age 30, earned next to minimum wage, why would you offer company sponsored insurance. If your employees went into an Exchange program based upon their young age, and low earnings they would receive premium supports to where their monthly costs would be quite low.

For example on the Washington Exchange web-site at www.waplanfinder.org a 28 year old earning $20,000 per year would have a monthly premium of $85 for a “silver” level plan. In addition they could have even lower premiums if they went to a bronze level plan or even a catastrophic plan. Catastrophic plans will only be available to people under 30 years of age.

Now, I took the $20,000 per year as the income for someone working full time at $10 per hour. Many of these stores will only hire part time, and many workers may be single parents. So, if we keep the income at $20,000 but add a child as a dependent then the $85 monthly premium disappears as they are now eligible for the greatly expanded Medicaid program.

I hope that most large employers have a social conscience and also that the competitive nature of hiring and retaining good employees will make the above scenario unlikely to materialize. This is one we shall have to wait and see.

ACA Updates

As promised I will be giving a monthly update on the Affordable Care Act which is now less than 3 months away from accepting applications.

Last month I gave an update of the various plans submitted to the State for approval. The Office of the Insurance Commissioner (OIC) web-site has been updated (www.insurance.wa.gov) and several companies have submitted plans since last month. These companies are Time Insurance; which does most of it’s business under the Assurant brand name, Molina Healthcare which specializes in Medicaid and low income plans, Coordinated Care Corporation which is the new carrier to the state and is an HMO that likewise specializes in the Medicaid and low income arena and finally MODA which is part of Oregon Dental Group.

In reviewing the filings, the one that caught my attention was the filing from MODA. The entire filing was only a scant 28 pages in length which is miniscule when compared to the 373 pages in the Time Insurance filing. MODA has filed the same premium rate for the entire state, whereas most carriers have dissected the state into 6 different rating areas. In addition the MODA Plan will charge smokers and non-smokers the same premiums.

MODA is not planning on being a major player in the Washington market as they are only anticipating a total of 2,000 members for the year, and their plan will be available both in and out of network. My assumption is, that as a part of the Oregon Dental Group, most of the PPO providers will be in the Vancouver area in Southwest Washington.

The following companies were previously “not approved” by the OIC but have all refiled their products and are now in the “under review” status.

Time Insurance – will be only offering plans outside of the Exchange, and they are anticipating annualized premiums of around $21 million which roughly translates to about 5,000 clients statewide.

Molina – has filed an Exchange only offering, for only three counties in the state which are King, Pierce and Spokane, and are anticipating an enrollment of just under 27,000 members.

Coordinated Care Corporation – This one surprised me for two reasons; it is an HMO and I was under the impression that the OIC was not going to approve any additional provider networks this year. But the greater surprise is that it is only anticipating member premiums of $2 million, which would mean about 500 members. It seems like an awful lot of regulatory filings and paperwork to build a network and then only anticipate enrolling 500 members. Breaking news…This plan was once again showing as “not approved” as of July 7th, and it remains to be seen if they will refile.

So, the bottom line is as far as Clallam County is concerned nothing has changed since last months column.

That column is still available for your review on the Sequim Gazette web-site under the columnists tab, www.sequimgazette.com/castell

Where do we go from here? More and more of the operational details are being worked out on an ongoing basis and next month I will answer a number of questions that have been posed to me.

During the month of September I will be making a number of presentations to various groups in the community If you would like to be kept informed as to the schedule, please shoot me an email and I will keep you updated.

And finally for those loyal readers who are on Medicare we are not anticipating many drastic changes for 2013. Medicare Supplement premiums appear to be relatively stable. Advantage plans have had an increase in funding from CMS of over 4%, so that also bodes well for premium stability. I have heard of another carrier possibly going to offer an Advantage plan for 2014 in Clallam County. The prescription drug plans offerings change annually and I do not anticipate any less changes for 2014. We already know that Aetna has purchased Coventry Health which offered the popular First Health Part D plans. We shall have to wait and see if Aetna will rebrand that plan under it’s own name or continue with the First Health name.

Posted on: July 8th, 2013 at 10:59am by aveadmin12. Filed under: Health Insurance
Tags: