Q&A with Cori Loomis
Some health reform mandates
still will be coming out Jan. 1
Q: Last week, the Obama administration delayed implementation of the employer health coverage mandate known as the “pay or play” mandate. The administration also said they would significantly scale back on the law's requirements that the new exchanges verify consumers' income and health insurance status until 2015. What's still coming Jan. 1?
A: Several key provisions. The health insurance exchanges or “marketplaces” are scheduled to begin open enrollment on Oct. 1. Other provisions include: (1) waiting periods cannot exceed 90 days; (2) caps on annual out-of-pocket maximums and elimination of lifetime and annual limits; (3) revised Summary of Benefits and Coverage notices and a required notice of availability of exchanges; and (4) excise taxes and fees, such as the PCORI (Patient-Centered Outcomes Research Institute) fee of $1 per covered person this year and $2 the next, and reinsurance fee of up to $63 per person.
Q: Will insurance premiums increase?
A: Many of the clients and other businesses that I've talked with are experiencing significant premium increases. I believe there are several reasons. First, Oklahoma has traditionally had relatively few insurance mandates and the Affordable Care Act (ACA) imposes coverage requirements that now have to be factored into premium costs. Second, the taxes and fees mentioned above (the PCORI and reinsurance program fees) are being passed through to both employers and employees. Third, the guaranteed issue requirement means insurers cannot turn anyone away and hikes are expected to cover the cost of covering more, sicker people.
Q: How are some employers addressing the expected increase?
A: Employers are really struggling with implementation of the ACA and its impact. The upside of the delay in the pay or play mandate is that it gives employers more time to analyze these issues and make appropriate adjustments. Part of the issue has been that the regulations have been trickling out and many have still not been finalized, so it was very difficult for employers to make decisions. Some options that employers are considering to address increased costs are: (1) switching to high-deductible plans; (2) discontinuing coverage options for spouses; (3) monitoring employees hours so that they do not qualify as full time; (4) refraining from hiring new employees; and (5) implementing wellness programs or initiatives to help keep employees healthy.
PAULA BURKES, BUSINESS WRITER