No! Wait!! Don’t leave…
Well, I’m recording this on my way back from Madison after attending Wisconsin Manufacturers and Commerce’s healthcare event that I mentioned earlier this week. My plan is to get this transcribed to have it post yet this week as I promised. With tomorrow being a half day and starting the day with our Maximizing Your Chamber Membership session and then a meeting with the Green Bay CVB regarding Restaurant Week (news soon!!) after that … it is tonight or late. So, tonight it is! Next week I will post about consumer driven healthcare and then the healthcare cooperative. Are you excited?
First thing I learned today: there are still a lot of questions for which we don’t have answers. That seems to be a consistent theme of the discussion. Next thing I learned is that if you are one of the millions of employers in the US and one of the hundreds of employers in our area who have less than 50 employees – the affordable care act will not penalize you in any way at all.
Not that you don’t need to pay attention and not that you don’t need to understand the affordable care act and its ramifications; but, you will not be penalized so you don’t have to worry about that. Feel better? Good. I have heard from so many of you in that bucket of folks who are very concerned, so I want to ease your mind.
If you have close to 50 employees, even if a good number of them are part-time, you need to pay closer attention. Yes, I’ll get to more about that in a little bit. Next, if you do have 50 employees and already offer decent health insurance at a reasonable cost, you probably don’t have much to worry about either. Let me asterisk that by saying one of the big takeaways from today is you need to talk to your insurance broker. Let me say that again – you need to talk to your insurance broker – if you are at the 50 employees threshold, it just makes good sense to know what you’re looking at for next year and beyond.
For the purposes of health care reform, you are a large employer if you have 50 or more employees. I have to say that is the smallest number I have ever heard referred to as a “large employer” by a governmental entity – but it is important to know the definition. Having said that, I’m going to try to explain the calculation in as simple a way as I possibly can. If you are even close or think you might be close to the 50 employee threshold, again, please talk to your insurance broker. Don’t wait, get on their calendar soon.
Here’s a calculation: let’s say you have 30 full-time employees. By that I mean they work consistently week-in and week-out full-time. They may be salaried, they may be hourly, but as long as they work more than 30 hours every week (or at least most weeks) they are a full-time employee. To that number you need to add full-time equivalent employees. How do you calculate that number? Well, this is a different calculation than I have heard before, so I want to make sure you hear it as well. Total all of your part-time employees’ hours for a month and divide that by 120. The answer to the equation is your full-time equivalent number. If you add your full-time employees plus your FTE number together and find your number is more than 50 you need to talk to your insurance broker because you are likely subject to the provisions of the healthcare act as a large employer and could be subject to penalties.
By the way, that “50” number of full-time employees including your full-time equivalent employees is an average. So, if in one month you had 75 employees and the rest of the year you only had 20 employees you would not have 50 employees and would not fall subject to the rules. There are lots of details regarding measurement periods, administrative periods and stability periods. Talk-to-your-insurance-broker. One more point: nothing in this law says that you have to offer health insurance to your part-time employees. You only have to consider your part-time employees when it comes to calculating if you are subject to the 50 employee rule or not. You will no more be required to offer your part-time employees health coverage after January 1, 2014, than you do today.
The next important component, if you are over the 50 employees level, is the insurance package you offer must be “affordable.” Affordable is defined as costing no more than 9.5% of your employee’s income. The short version is this: if you have an expensive health plan and a number of employees who make minimum wage, or near minimum wage, you need to be concerned about the affordability component – otherwise it probably won’t apply. Having said that talk to your insurance broker.
Something else repeated today is regarding the rates that will be charged both through the exchanges as well as premiums for private insurance. The general consensus is that the rates will go down for companies who have a high number of older or less “well” employees and will go up for those companies have a higher number of younger or healthier employees. The fear is the exchanges will be “dumping grounds” for those who can’t get insurance elsewhere. No one knows what those rates will be here in the state of Wisconsin. As I mentioned earlier this week, only the states doing exchanges themselves have a sense of what their premiums will be, and at this point we’ve only heard details from California (and to some extent Washington and Oregon). The news from California regarding premiums on their exchange have been positive. We have our fingers crossed that we will hear similar news when our rates are announced here in Wisconsin.
A couple of other important notes that stood out to me:
First, the only people who will be eligible to buy insurance on the exchanges and receive subsidies from the federal government are those individuals who either have no insurance option at all through their employer or those who don’t have an “affordable” insurance option that also meets the “minimum essential coverage” requirements through their employer and make between 100% and 400% of the federal poverty level. (Yes … yet another item to talk to your insurance broker about!)
Second, if you are one of the employers I mentioned who have more than 50 employees and do not offer an “affordable” option for your employees, you will be subject to what is called a “Pay or Play” penalty that will cost $2000–3000 per employee. Please refer to my ongoing theme: if you have 50 or near 50 employees, you need to talk to your insurance broker.
The exchanges/cooperatives are to begin taking enrollments October 1 and then begin operation on January 1, 2014. There was also conversation today on whether all of this will happen on the schedule as outlined. Here is the long and short answer: probably. The general consensus is that a delay will only happen if an “operable” exchange is not in place in the state of Wisconsin. “Operable” was defined as 71 of 72 counties in the state having coverage under an exchange available. From what we heard today that will happen.
As I mentioned earlier this week, Common Ground Healthcare Cooperative will offer products in the counties that we serve. We also learned that there were at least two health insurance companies that submitted rates at the end of April that will also serve our area for the exchange. On the insurance panel today were representatives from both Humana and United Healthcare. Humana indicated they have submitted rates for the individual exchange but not the small employer exchange. United Healthcare was not able to answer if they would be in the exchanges in Wisconsin at all. It is a big decision for an insurance company to decide given the number of unknowns. However, given United Healthcare is not involved in the California exchange, it is a likely scenario United will not be involved in the exchange for Wisconsin either, at least not initially.
So that’s it from today. You would think from a four hour meeting I would have more information! However, the reality is we just don’t know all of the answers yet. Next Wednesday I will be going down to Milwaukee for an informational meeting of the Common Ground Healthcare Cooperative. When I return from there I will have more information regarding what that may mean for you and your family as well as potentially for your employees. At the very least, it will be another option.
Finally – no one took me up on my offer of car-pooling to Madison. Trust me, I didn’t take it personally! I know it’s hard to take a half day out at a busy schedule especially when you don’t know if you will hear anything that you can actually use. It is still pretty early in the process. The second Wednesday of October we will be holding a session that will give a lot more information. We will have detailed information by that time as the exchanges will be taking applications. We plan to have a representative from the office of the Commissioner of Insurance, someone from WPS Health Insurance/Arise Health Plan as well as the Common Ground Healthcare Cooperative on hand to give information and answer questions. A lot more detail on the event to come, I promise.
I filled a good portion of the drive by listening to Olympia Snowe’s new book, “Fighting for Common Ground: How We Can Fix the Stalemate in Congress” on Audible via my iPhone. In my post last week I was talking about Cassie Schuh’s reading list from our leadership session in May, I mentioned that I was planning to listen to some of those books. So far, I would really add this book to that list. I would say it is for anyone interested in the way our Congress is working (or not working as the case really is), anyone who has a political interest or just interested in the way things are happening (or not happening) in Washington. If any of you have read it or plan on reading I’d love to hear your thoughts on it as well.