Workshop gives crash course on health care
law changes
http://www.tennessean.com/viewart/20130825/GALLATIN01/308250052/Workshop-gives-crash-course-health-care-law-changes
Employers, individuals could see higher insurance rates with new mandate
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Jason Humphrey, left, and Tom Burroughs, both with Heritage Financial Group in Hendersonville, spoke to local business owners about the Affordable Care Act on Thursday during a workshop sponsored by the Tennessee Small Business Development Center at Volunteer State Community College. / Sherry Mitchell/Sumner A.M.
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Just over a month remains before the rollout of the Affordable Care Act, known as Obamacare, designed to provide health insurance coverage for all Americans. But those working with local businesses to prepare for the federal mandate say the new law could leave more individuals without coverage because of rising costs.
About 40 business owners heard details of the new law on Thursday at a workshop sponsored by the Tennessee Small Business Development Center at Volunteer State Community College. Tom Burroughs and Jason Humphrey of Heritage Financial Group, an employee benefits firm for group clients, presented the information.
As of Oct. 1, open enrollment for the health insurance marketplace or exchange is planned to be online for residents. In Tennessee, officials have opted out of a state partnership exchange. Local residents will choose from the federally facilitated health-care exchange, along with 25 other states.
To date, there are four carriers that will be providing coverage under the federal exchange in Tennessee, Burroughs and Humphrey said: BlueCross BlueShield of Tennessee, Community Health, Humana and Cigna. While none of the companies are officially releasing rates until Oct. 1, Burroughs said recent research through his carrier, BlueCross BlueShield, revealed some disturbing finds.
“My (family) rates are going up 100 percent — I was in sticker shock,” Burroughs said, adding that his $1,000 deductible would also be raised to $3,700.
In another scenario, Burroughs calculated rates for a 32-year-old male with a $1,000 deductible on a copay plan. The cost difference between rates in December 2013 and January 2014 is 89 percent higher, he said, adding that those types of proposed increases are leaving individuals and businesses alike wondering if the new plan will even be financially doable.
“That’s what individuals and businesses are starting to talk about — are they going to be able to afford this after it is implemented?” Burroughs said. “It could be that more people are going to be uninsured after this is implemented just because of the cost.”
Price to pay
Ginger Eastham with Perfect Pay in Gallatin deals with multiple small-business owners who she says have already been hit with higher rates in the past few years and are now worried about what is coming down the line.
“A lot of these companies have already seen anywhere from 28 to 39 percent premium increases and now they are getting notices of (more increases),” she said.
Under the new plan, the maximum deductible for an individual is $2,000, Humphrey said, and $4,000 for a family, so those who had been able to choose a higher deductible in the past to get lower rates will see increases.
In addition, insurance companies can no longer deny coverage to those with pre-existing conditions and the cap for lifetime limitations on how much coverage is available through a policy has been lifted. While all of this sounds beneficial, Humphrey said, there is is a price to pay to have these things.
“To me, this is the reason that premiums are going up,” he said.
Everyone must have health insurance beginning Jan. 1, 2014, or pay a fine that starts at $95 for an individual and goes up to $695 if insurance is not obtained by 2016. Fines will paid through the IRS when 2014 taxes are filed, Humphrey said.
Gallatin attorney Walter Stubbs, who attended the workshop, asked about the likelihood of individuals paying the fine and then waiting until they needed insurance to purchase it. Humphrey said that is a real possibility.
“I think there will be people who pay the $95 if their rates go up and then purchase insurance if they need it — that could be a strategy that some people may take. Of course, that is not going to work in the event of something like a heart attack where you have to have treatment right away,” Humphrey said.
Going forth, plans must meet minimum coverage standards as outlined by the federal government. The government has mandated 10 inclusions in all plans, regardless of need, Humphrey said.
“If you are a 42-year-old man, guess what — you’ve got maternity coverage whether you need it or not,” Humphrey said.
Making sense of it
In another part of the law, all businesses with 50 or more full-time (30 hours a week or more) employees must provide insurance benefits by Jan. 1, 2015, or face a penalty of $2,000 per employee beyond the first 30 employees, which will also be imposed by the IRS.
Burroughs said hours between employees will be totaled and converted for a final tally.
“If you’ve got two part-time employees who are working 15 hours each week, that will count as one full-time employee,” Burroughs said.
Hendersonville chiropractor Brad Hagan said postponing some of the mandates, such as penalties for employers, is “ridiculous,” making him feel that the Affordable Care Act is not well thought-out.
“If it doesn’t make sense now, it’s not going to make sense in 2015,” he said. “If it’s such a great idea, why not go ahead with all of it? And now it looks like there may be just as many without healthcare as there were before. What kind of sense does that make?”
Under the new guidelines, affordable coverage to employees means an employee cannot pay more than 9.5 percent of his or her W-2 wages or gross income. Employers will be fined $3,000 for each employee who pays more than 9.5 percent toward healthcare premiums. Those employees will also qualify for a government subsidy.
Burroughs said information he has received through the IRS indicates a potential plan to audit every business with at least two employees over the next five years. This will require a solid plan on the part of every local employer, he said.
“You need to decide whether you are going to be proactive or reactive and what you are going to do if the (employee insurance) plans are too expensive,” Burroughs said. “Will you pass that (expense) on to employees or reduce some of your other benefits?”
