Many people and small businesses in Oklahoma won't sweat the details of President Barack Obama's transition relief aimed at helping people and companies from losing health coverage.
Thanks to negotiations between the Oklahoma Insurance Department and the state's biggest insurers, many of those who would have faced canceled policies to their plans — because the policies didn't meet new standards under the health reform laws — renewed coverage early to take advantage of a grace period, ending Dec. 1, 2014.
Oklahoma City-based Amundsen Food Equipment, which employs 25, already agreed to pay 5 percent more to renew its plan for a 14-month period, President Cary Amundsen said.
“Our people like our plan, and love that we pay for most of the premiums. But we've made known to them that if and when the premiums go dramatically up as predicted, the company will be forced to increase employee participation rates or possibly drop the company-funded plan altogether,” he said.
Likewise, employee benefits consultant Cher Bumps said she's moved many group plans to a Dec. 1 renewal versus Jan. 1, so they can defer for 11 months the estimated increased costs of 20 percent to 50 percent. However, employers starting Jan. 1 will have to pay about 3.5 percent more in premiums to fund fees and taxes under the Affordable Care Act, she said.
Dave Ortloff of Dillingham Benefits said many of the employers he serves already have made the decision to accept new, typically more expensive, ACA-compliant policies that start Jan. 1, “because they were told their current policy was ‘going away.' Employees also are being required to share in the increased costs of these new compliant plans in most cases,” Ortloff said.
“Even if the insurance companies could manage to come up with pricing for these old policies in the coming days, while factoring in the new taxes and fees associated with ACA, the state Insurance Department would still be required to approve those rates, and that could take weeks,” he said. “When you also factor in the time needed for an employer to make their decision, then the time needed to implement an employer's open enrollment period and get coverage bound and insurance cards issued to employees, I just don't see all of that happening by Jan. 1.”
Brandon Long, a health care attorney with McAfee & Taft, said he “isn't sure how helpful the relief will be to the individuals and small businesses because it looks like insurance companies aren't required to extend the coverage, and state insurance commissioners are not required to allow the extended coverage.”
Long noted that mini-med plans still are set to terminate Dec. 31. Such plans — which offer lower costs and risk to employers — carry annual caps on benefits, and lifetime coverage limits, which are illegal under the ACA.
O'Reilly Auto Parts has offered mini-med plans. An Edmond store manager told The Oklahoman in 2011 that he pays premiums of $300 a month for a family plan with a $15,000 annual limit.
But an associate who answered the phone at the store on Thursday said employees that day had received a company newsletter announcing the lower two tiers of health plan options were being dropped because of the ACA. A human resources professional with Springfield, Mo.-based O'Reilly said company health plans are being reviewed in light of Obama's announcement.
About 2.5 million consumers nationwide rely on mini-meds for their primary source of health insurance, according to industry statistics. Some plans top out at $10,000, $5,000 and lower annually.