VOL. 129 | NO. 14 | Wednesday, January 22, 2014
Insurance Through Work? Health Law Affects You Too
CARLA K. JOHNSON & TOM MURPHY | Associated Press
The health care overhaul's reach stretches far beyond the millions of uninsured Americans it is expected to help. It also could touch everything from the drug choices to doctor bills of people who have insurance through work.
The law isn't expected to prompt sudden, radical changes for workers. So you probably won't lose your job due to the overhaul, despite claims by the law's opponents. But benefits experts say there are several other ways the law can leave fingerprints on the benefits of the roughly 149 million people who are covered through their jobs.
IS MY JOB SAFE?
Republicans have called the overhaul the "Job-Killing Health Law." This is in part because of the law's requirement that companies with 50 or more workers offer full-time workers – defined as those working 30 hours or more – health coverage.
Some companies have said they are cutting part-time workers' hours to keep them below that threshold. Texell Credit Union in Temple, Texas, is one.
CEO Tony Hale told a credit union trade publication last month: "We don't like doing this because that takes hours out of paychecks and we know people need the money."
But the anecdotes of companies cutting employees' hours aren't showing up in official U.S. employment numbers. In fact, recent government figures show job gains, not losses. Employers are giving workers about the same number of hours as a year ago. And the number of part-time workers who would rather work full time is lower than a year ago.
And not every employer is looking to make cuts. Caterer David Borris, who has 25 full-time workers and up to 80 others during the holiday party season, said he's offered insurance for full-time workers since 1990. He believes the law has stabilized what he pays for insurance premiums.
Borris, whose suburban Chicago company is too small to fall under the law's mandate, argues that health benefits attract good workers. "Good employees ain't a dime a dozen," he said. "I need a cook who doesn't put too much pesto on the vegetable focaccia sandwich. I need drivers who don't get lost."
Still, it's a long time yet before larger employers would pay a penalty for not providing health insurance to full-time workers. That penalty, along with the coverage requirement, was delayed until 2015. So the law's biggest hiring effects could be ahead.
WILL I PAY MORE?
Many companies already are starting to change benefits to avoid an overhaul-mandated tax on high-cost plans that takes effect in 2018. One way a company can lower the cost is to raise an employee's out-of-pocket expenses.
So, your plan may introduce a bigger deductible, which is the amount you have to pay for care before most coverage starts. It also might require you to start paying more at the doctor's office in the form of a higher co-payment.
Employers think these moves also will help control rising health care costs, a problem that has been around longer than the overhaul. The idea is that patients who have to satisfy a $1,000 deductible before insurance coverage starts will shop around for the best deal on the MRI their doctor ordered.
Overall, the federal law could raise the total cost of an employer-sponsored health plan from 1 percent to 5 percent, said Tracy Watts, a senior partner with the human resources consultant Mercer.
Employees pay a portion of that total through paycheck deductions, and whether those grow will depends on the employer and the coverage. For instance, costs could rise if your coverage has to be adjusted to meet a minimum value set by the law or if your employer winds up covering more people.
The overhaul also requires coverage of a list of benefits considered essential, including things like mental health treatments and pediatric dental and vision care. A company's costs could rise if they don't already cover everything on that list. That could then be passed on to employees.
Taxes and fees required by the law also could add to insurance bills.
WILL MY COVERAGE CHANGE?
The law may prompt some companies to drop coverage for their part-time workers and send them to public health insurance exchanges.
Some businesses also may start excluding spouses from their coverage, but most companies have avoided doing that, said Jim Winkler of the benefits consulting firm Aon Hewitt.
And drug plans also may start offering fewer choices for prescriptions or a narrower network of pharmacies that people can visit. The 2018 tax that is motivating companies to adjust their health insurance plans also is prompting them to narrow the list of drugs they cover, said Dr. Steve Miller, chief medical officer for Express Scripts Holding Co., the nation's largest pharmacy benefits manager.
That means a plan may offer a choice of two options instead of three for a particular prescription. Being restrictive like that gives drug plans leverage to negotiate better prices and consequently, lower costs.
At the same time, most people can now get flu shots or fill birth control prescriptions with no out-of-pocket costs because of an overhaul provision that makes it easier for people to get preventive care.
WHAT ABOUT WELLNESS PROGRAMS?
For years, employers have tried to control medical costs by offering voluntary wellness programs that reward workers for participation. T-shirts and gym memberships progressed to discounts on employees' share of insurance premiums if workers kept their cholesterol levels low or their weight down.
The trend got a boost from the health law starting Jan. 1, when employers could begin offering bigger incentives than previously permitted by law. The rewards now can equal up to 30 percent of the cost of health coverage. That means a worker who normally pays half of a $5,000 annual premium for health coverage could get up to a $1,500 discount for losing weight. Additional rewards are permitted for taking part in stop-smoking programs.
Employers are paying attention. The nonprofit International Foundation of Employee Benefit Plans said two in five employers are ramping up their wellness initiatives because of the law. But concerns about fairness and discrimination have been raised by unions and consumer advocates, which could dampen the trend.
Wellness rewards could end up punishing older workers and minorities who are more likely to have chronic conditions and could be forced to pay higher premiums. And some of the measurements are controversial: Body mass index, for example, can overestimate body fat in people who have a muscular build.
AP Medical Writer Carla K. Johnson reported from Chicago. AP Business Writer Tom Murphy reported from Indianapolis.
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