A one-year delay in part of the federal Affordable Care Act hasn't stopped a new round of changes headed your way.
That means your employer is researching and making decisions that will affect you in 2014 and set the stage for health care coverage in future years.
The law, also known as Obamacare, aims to provide millions more Americans with health care coverage.
Pushed back one year to 2015 was the law's so-called employer mandate, which will require employers with 50 or more full-time employees to offer all employees an affordable health plan and report that coverage to the government or face fines.
All other changes due to start Jan. 1 are still on the way, and federal officials have urged employers to move ahead with “making health coverage affordable and accessible for their employees.”
To get an idea of what employers may be pondering, we talked to three Midlands businesses, from small to large.
222 S. 15th St.
Business: IT consultants and software developers, 43 employees in Omaha and five other states.
Coverage now: Blue Cross Blue Shield of Nebraska. Employees pay 20 percent of premium, receive $150 a month for health savings accounts; deductibles are $3,000 for single, $6,000 for family. Coverage costs QAT about $9,000 a year for each family covered, although some employees have single coverage and some don't accept the plan.
Options considered: Share any premium increase with employees; switch to self-insuring.
QAT Global was an early adopter of consumer-driven health care, contributing to employees' health savings accounts nine years ago so they would have “skin in the game” when making health choices, said HR manager Brent Hodgen. Costs went down significantly the first year, then resumed their annual climb.
“As a small group, we haven't been the most healthy,” Hodgen said. “We've endured 15 to 30 percent premium increases.”
Despite the increasing cost, he said, the company continues to offer health insurance “to entice and retain people. I would say we have a pretty generous benefit offering in our field.”
Although some provisions of the law don't apply because QAT has fewer than 50 employees, other provisions take effect, such as the coverage required in group policies. When QAT's health plan renews in February, Hodgen expects it will add pediatric dental and vision coverage.
He expects Blue Cross will recoup by raising premiums to cover the risk of claims. Two years ago, Hodgen said, one-third of the plan's 15 percent increase was because the law extended coverage of dependants to age 26.
Hodgen said he doesn't know where 2014 premiums will end up. Even so, there's no plan to drop employees' coverage.
“If you give them $5,000 and tell them, 'Go ahead and get health care on your own,' you're forcing our employees to do something they do not want to do,” he said. As for the monthly contribution to employees' health savings accounts, “we have some people who would probably kick and scream if we tried to take that away from them.”
Hodgen said he opposed passage of the federal law partly because it does not address health care costs.
Hodgen favors having more people insured and said the law's ban on excluding people with pre-existing conditions was “good for humanity.” But he sees more bad features than good in the law and believes a company already offering decent insurance shouldn't be penalized by the government.
“But I'm paying more attention to it,” he said. “We haven't changed our plan dynamic, but we may look at self-funding” — essentially, paying employees' claims while Blue Cross or another company administers the premiums and payments. He hopes that making the company responsible for paying claims will result in lower costs than having an insurance company assuming the risk of claims.
Starting next year, if employees don't like the company plan, Hodgen said, they would be able to go to the online marketplaces, or state “exchanges,” formed under the Affordable Care Act. But QAT employees live in six different states, and their choices will vary. He thinks employees are likely to stick with company insurance.
“If you force them out to the exchanges,” he said, “you're going to lose people.”
Royal Engineered Composites
Business: Manufactures high-tech aeronautics components, 140 employees
Coverage now: No group coverage; reimburses employees for individual policies they buy, costing $7,500 per family and about $450,000 a year for the company.
Options considered: Switch to self-insuring; continue reimbursing for individual policies in 2015 even if it means paying penalties.
Royal Composites falls into an uncomfortable middle ground, said Phillip Gill, president and CEO. Smaller companies are put into pools of similar employers, and larger companies have enough people to spread the cost of claims by sick people among many others who are healthy.
Those in the middle, like Royal, are dependent on their own claims experience to influence rates. In Royal's case, two or three major claims in recent years stressed its insurers.
“We're in a horrible position because our (group) insurance rates are approximately 50 to 100 percent greater than if each person took out an individual policy,” Gill said.
So for the past four years, he's been letting his employees choose a health plan on their own and then reimbursing them for their premiums. Gill plans to continue that practice next year, now that the government has delayed until 2015 the mandate that will require employers with more than 50 full-time employees to offer group coverage or face penalties.
That puts off for another year an expected increase in the company's health care costs, from the current $450,000 to as much as $800,000, he said, citing estimates from benefits advisers.
Gill said becoming self-insured might put a cap on the company's rising expenses, possibly with a high stop-loss coverage to guard against catastrophic claims. “That's another possibility. We're looking hard at that, but we don't have any numbers yet.”
The company is trying to emphasize wellness with its employees and their families, he said, “but lots of luck in changing people's behavior.”
Gill said he hopes to cope with the situation for three or four years — long enough, he thinks, for the federal law to collapse or be amended into a system with the government paying for all health care. He said the employer mandate delay, a surprise announcement earlier this month, is a sign that the law will be “a total mess.”
“It isn't really workable. It'll just be nationalized. There's no small business that thinks we ought to be insuring our people,” even though many of them do it to recruit and keep good employees.
Royal's products go to aircraft manufacturers in Brazil and Europe and to U.S. manufacturers who sell to domestic and foreign aircraft makers. Most of his direct competitors are U.S. companies facing the same dilemmas on health insurance.
But, Gill said, “We're competing internationally, and those (foreign) companies don't pay insurance. The government does it. We're the only country in the world where companies pay for insurance.”
Nebraska Furniture Mart
700 S. 72nd St.
Business: Retail sales in Omaha, Des Moines and Kansas City, Mo.
Coverage now: Self-insured, with options for a preferred provider organization, two high-deductible plans with health savings accounts and a “skinny” plan that offers only the minimum coverage required by the Affordable Care Act.
Options considered: Maintaining present plans; continuing to promote wellness among employees.
Nebraska Furniture Mart has been “grooming” its employees for health care changes the last few years, with an emphasis on wellness to reduce medical care expenses, human resources director Megan Berry Barlow said.
About 1,550 of the Mart's 2,900 employees joined its health plans, covering about 2,890 people when you count family members. Most of the other employees have insurance elsewhere, such as with a spouse's employer or parents.
Employees get discounts for taking part in wellness programs. In general, the company pays between 80 percent and 93 percent of premiums for employee-only policies and 77 percent to 90 percent for family coverage.
Barlow said she expects an increase of 6.5 to 10 percent in 2014 premiums because of changes required by the law. The total change in premiums, likely shared by employees, also will depend on employees' health-related claims.
The Mart's cost increases have been less than 10 percent annually the last few years, she said, in part because of the company's efforts to help employees quit smoking, lose weight and stay healthy.
The company doesn't plan to reduce benefits to offset costs of the new law, she said. Health insurance is part of the Mart's recruiting and retention effort in an Omaha job market with unemployment below 4 percent, Barlow said. The Mart plans to hire 175 more people in Omaha to support a new Texas store that is being built.
The reasons for offering good health insurance go beyond complying with the law, she said.
“Finding great people is not easy. Hanging on to great people is almost harder,” she said. “If we took our eye off the ball of what benefits people really want, how do you attract and retain quality people? Politics aside, this is what's happening. We need to do the best for our employees.”
The high-deductible plan, which includes a contribution by the Mart to employees' health savings accounts, is in its fourth year. It's popular with employees, although the Mart kept its more-traditional preferred provider organization, too.
The Mart is somewhat in a minority among employers because its PPO and high-deductible plans are considered grandfathered because they were in effect before March 23, 2010, and have remained basically the same since then, Barlow said. That means the plans already meet the law's standards and must provide children's coverage up to age 26 only if it is not available elsewhere.
“We've taken a lot of time and energy toward educating our staff,” Barlow said. “We try to make a direct correlation to our employees and their families that their use of health care is directly related to the cost of health care, and the more we can use it judiciously and for prevention, that's really the best way to control costs.”