ObamaCare & Incentives
sstogner
23 Posts
Hey Folks - This week the owner of our company met with our CFO and advised that our self-insured insurance program was costing the company too much money, and is looking to significantly reduce the expense on the employer. We're looking at multiple options, including giving up our 'grandfathered' status under the Waiver, which we've recently submitted for extension into 2012.
We're pricing Fully Insured Plans, but that will most definitely not work because insurance companies require at least 75% participation. We have 30% participation in our self-funded plan. We're looking at a continuing with self-funding, but adding stop loss which will cost us our waiver. Our employee base is mainly low income (nurses aids, housekeepers, direct care workers) and will definitely fall under the $44000 poverty level come 2014 when Obamacare takes full effect (if it takes full effect). Most of them cannot afford the coverage.
However, I was asked today if we could incentivize health plan participation by tying enrollment to PTO benefits (i.e. you participate, we give you PTO; you don't particpate, you don't get PTO OR you get a reduced amount). I know that federal law doesn't get involved with private employers as it relates to vacation, PTO, holiday pay, bereavement and leaves that totally up to the employer. So, we could probably get away with it. Has anyone heard of a business successfully doing this?
We certainly understand that it will most likely be a morale deflater, but Medicaid for the 2nd year in a row is drastically reducing our rates (cost us a million in revenue last year), and we'll be taking an even bigger hit this September. So, we're looking at all the angles.
Any thoughts or suggestions would be most welcome. Thanks!!
We're pricing Fully Insured Plans, but that will most definitely not work because insurance companies require at least 75% participation. We have 30% participation in our self-funded plan. We're looking at a continuing with self-funding, but adding stop loss which will cost us our waiver. Our employee base is mainly low income (nurses aids, housekeepers, direct care workers) and will definitely fall under the $44000 poverty level come 2014 when Obamacare takes full effect (if it takes full effect). Most of them cannot afford the coverage.
However, I was asked today if we could incentivize health plan participation by tying enrollment to PTO benefits (i.e. you participate, we give you PTO; you don't particpate, you don't get PTO OR you get a reduced amount). I know that federal law doesn't get involved with private employers as it relates to vacation, PTO, holiday pay, bereavement and leaves that totally up to the employer. So, we could probably get away with it. Has anyone heard of a business successfully doing this?
We certainly understand that it will most likely be a morale deflater, but Medicaid for the 2nd year in a row is drastically reducing our rates (cost us a million in revenue last year), and we'll be taking an even bigger hit this September. So, we're looking at all the angles.
Any thoughts or suggestions would be most welcome. Thanks!!
Comments
Hey Frank,
The rationale was that we are a small company, in the grand scheme of things, and the owners/CFO were concerned about unlimited caps with the Health Care Reform Act. The grandfathered status, under the waiver, allowed us to keep our Base Plan capped at $25k, and our Buy-Up Plan capped at $100k.
To have complied with the Health Care Reform Act would have significantly reduced benefits (i.e. we'd probably had to have gotten rid of the plan altogether and coast til 2014) or made the premiums unaffordable for the participants. At 30% participation, only the sickest of the sick seem to be in the plan (those that HAVE to have coverage) and are depleting our reserves.
I've recommended on numerous occasions lowering the premiums (wrong wording because we're self-insured, no stop-loss) on the employee portion to get more participation and hopefully get our younger/healthier employees to participate to strengthen reserves, but that would add additional expense to the employer paid portion, and we're already paying approximately $1.6 million for 300 insureds. The owner is trying to reduce expense to help balance out the cuts in Medicaid, so they've asked about using PTO as a bargaining chip.
We're also looking at busting out of the waiver, losing the grandfather status in order to adjust the split (employer/employee) of who is paying what, but frankly passing on more expense is just going to have folks bailing out of the plan too, which would totally wipe out the reserves. The upcoming penalties in 2014, $2000/yr per FT employee (we have 1000) for NO Coverage, or $3000/yr for having a Plan that a FT declines and picks up insurance through the proposed Exchange is a daunting figure as well. Frankly, any plan is going to have a tough time competing with the Exchange. A lot of business are going to wind up closing their doors because they are not going to be able to afford to operate because of these constraints.
We're just grasping for straws (at this point air, as well), so I told the owners/CFO that I'd reach out to the Network and see what others are doing. Thanks for listening and any thoughts or suggestions.
sstogner
san antonio, tx
Disclaimer: As a consumer, I love most of what's in the healthcare reform act. I wish it went further. As an HR professional, I recognize the additional burden on myself and my employer. But I tend to approach new regs, reforms, etc. the same way, regardless of my personal likes or dislikes - I embrace them, and try to figure out how to use them to my advantage. HCR is no different.
I think you should seek a broker out or someone who sells stop loss insurance and see what they have to say. You may be surprised at how you can boost your coverage and reduce your costs. If you have a broker already, get a new one.
Good luck!
Nae
May the Force be with you! **==