The uninsured and under-insured are watching, with bated breath, as the Supreme Court of the United States decides on the legalities of government enforced healthcare for all.
Do you know who else is watching? Your employer.
This isn’t a post about if it should or should not be deemed legal. This is a post about what is going to happen to you at work if healthcare reform (as it is written now) becomes a bill.
There’s an ugly little secret that your employer probably isn’t telling you. Since I know this secret, I’ll share it. Sharing is caring! Telling you this will most likely result in me being blackballed from the Human Resources community. Oh well.
It won’t be the first time I’ve been honest about our dirty little HR secrets, thus resulting in my unpopularity among my peers.
Are you ready?
If healthcare reform passes through the court, and becomes fully implemented in 2014, your employer will consider dropping health insurance for its employees, and there will be many employers who no longer offer health benefits.
Yes. It’s true. I hope the state exchanges do a nice job with their health plan options (we still don’t know what they will offer), because it may become the only place you can go for insurance.
Why? Because of the “Pay or Play” provision. It’s very controversial to your employer.
Pay or play basically means, according to the way healthcare reform is written today, that your employer will pay a penalty one way or another. We (the employers) have to offer vouchers for employees to take to the state exchange should they choose to pass on our health benefits. We have to offer high cost plans. And we have to figure out your household (not just the employee, but the spouse as well) income. But no matter what we do or how hard we try to get it right, we will face financial penalties to help fund nationalized healthcare.
- If the employer offers health insurance, and you choose to take your voucher to the state exchange?
PENALTY FOR THE EMPLOYER - If the employer offers insurance, and an employee simply chooses not to take the insurance or go to the state exchange?
PENALTY FOR THE EMPLOYEE - If the employer chooses not to offer insurance at all?
PENALTY FOR THE EMPLOYER - There’s also the “Free Rider” penalty employers face. If the employer’s insurance is consider unaffordable or low value, and the employee qualifies for government subsidies (any family of four that makes less that $89,000 per year qualifies)?
PENALTY FOR THE EMPLOYER
So if you look at it from the employer’s point of view, it’s just a whole lot simpler to NOT offer benefits and take ONE penalty, rather than offer benefits and wager the “Pay or Play” game to see who stays in and who goes out of the plan, ultimately resulting in unavoidable penalties.
It’s a whole lot cheaper for the employer to pay the proposed tax penalties than to pay for your insurance.
Currently, for employers with 50 or more employees, the penalty for not offering benefits will only be $2,000 to $3,000 per employee that qualifies for health insurance. In 2011, the average employer cost of healthcare per employee, on a family plan cost the employer over $10,000.
It sort of feels like government’s giving your employer a simple math equation. Are they trying to smoke out employer sponsored health benefits? I think so.
As it stands, most companies are better off paying the penalty, and simply raising employee wages to compensate for what they will lose in benefits.
They employees can then take their chances at the state exchanges. And hopefully *fingers crossed* they can find a great health plan like the one we offer. One that pays claims. One without a ton of red tape. I mean, most government run things don’t come with a ton of red tape, right?
I know, not all employer sponsored plans are great.
But some of them really are wonderful. Some of them truly take care of employees at very little or no cost to them. These are the plans that I am concerned we will lose in our country.
To date, healthcare reform has done many great things to employer sponsored plans, things that really aren’t costing employers much in the long run.
To name a few of my favorites:
- Children no longer have pre-existing conditions
- Children can stay on their parent’s plan until they are 26 years-old (longer in some states)
- Preventative coverage is paid for at 100%
I agree with you 110%.
I agree with you, the system is currently broken, and everyone should have access to affordable healthcare (even the sick and unemployed/underemployed). But some of these employer provisions don’t make sense.
Shouldn’t the employers just continue to make necessary changes that better the health care system? I think so. And I think most companies are fine with the changes we’re making. Heck, our company hasn’t charged employees co-pays for preventative care for years as part of our wellness initiative.
For those of you who have jobs, and you’re satisfied with your company’s benefits, I want you to ask your company this question:
Is there a chance that you’ll drop our health insurance in 2014 and force us to take coverage through the state exchange?
If they tell you there is not a “snowball’s chance in Hell” that they’d ever consider dropping your benefits… THEY. ARE. LYING. TO. YOU.
We are all considering it. All of us. And just like you, we’re waiting to see how this whole thing pans out with the Supreme Court. We want to figure out what will make financial sense for our companies.
What do you think about it? Do you agree that it makes it financial sense for companies to stop offering health insurance? Will you be upset if your employer chooses to pay (rather than play)?
{ 26 comments… read them below or add one }
A couple of years ago my brother had a very rare form of cancer. He was treated in public hospitals by very highly qualified consultants and received excellent treatment which included radio therapy, chemotherapy and eventually a bone marrow transpant.
Thankfully, my little brother is now 100% better.
This whole process which from diagnosis to all clear took over a year involved six months of my brother lying in a hospital bed.
It cost my family not a penny. The hospital even provided a shared apartment across the road so my mother could be with him as much as possible.
I’m glad I’m Irish.
I dread to think how much worse an already terrible situation would have been if we had to worry about financial constraints.
Our system is broken. That’s for sure. Do you know how long it takes to get a person on Social Security disability benefits in this country right now (so say you are sick, too sick to work)? Over two years. I hope you don’t die while your COBRA runs out and you wait for the government to hear your case.
THIS is the problem. Our current government system is broken. It’s too flooded. And now we want to push everyone onto it before we fix it.
It’s crazy.
My husband’s work provides insurance, and it used to be alright. Now, however? It costs us $592 every month. 1 dependent or 8, that’s the price. And then? It’s set up sort of like Medicare, and we have a doughnut hole. So basically, I have to ration our health issues, because we will run out of coverage, while still paying the $592 every month. I broke my foot and sprained my ankle super bad two years ago, in December, and was in a boot thingy for 6 weeks. Then, I went to the orthopedist and had 3 physical therapy sessions, AND WE REACHED THE HOLE. In March. Because I had to leave room in our budget for my daughter’s well child visits and any miscellaneous issues with them, I didn’t take care of any of mine or my husband’s health issues. As a matter of fact, that experience burned me so badly that when I broke the other foot 9 months later(I Know, it’s ridiculous), I didn’t go to the doctor. I just used the boot they’d given me for my other foot, and it hasn’t healed right at all. I can’t wear heels, or even walk without limping.
I am afraid to go to the doctor because I cannot imagine what I would do if something happened to my children and I didn’t have enough coverage left to take care of them. That? Is BS. You’re right, the system is broken. And while no plan for anything is ever perfect, I am just grateful that this is on the radar, and that there are people out there who are trying to come up with a better solution. I am also grateful that I do not have it worse, as so many others do.
I have one teensy issue with your essay, and that is that private companies will be offering insurance on the state-run exchanges, so people purchasing insurance on the exchange shouldn’t run into “government red tape” within the plans themselves. Of course, part of the reason the healthcare situation is so bad in our country is because insurance companies are for profit and therefore construct plenty of barriers to prevent claim pay-outs in order to turn a profit for their shareholders. But that’s another question entirely.
I am interested to see how decoupling insurance from employment will play out. I firmly believe that everyone should have coverage because we end up subsidizing the uninsured in many ways that are more costly than the individual mandate currently being debated in the SCOTUS. The difference is that when we insured individuals pay more for emergency care to cover those who seek care at ER’s across the nation, it’s not as straighforward as saying, “Hey, everyone seeks medical care when they need it. We might as well insure everyone even if that means we expand programs like Medicaid and Medicare, etc.” and make it all possible with individual mandates so that the healthy, low-cost people help subsidize sick/high-cost patients. It’s really no different than saying, Ok, guys, we’re gonna agree not to murder each other because it’s the decent thing to do except we’re replacing not gonna murder with we’ll all pitch in and help eachother and in exchange, I’ll get help, too, when I need it.
The state exchanges are ran by the government. Thus, government red tape.
Yes, that’s true, but in your article you stated that the plans would be government-run. At least, that’s what is implied. I’d copy and paste here, but am unable to.
It is government run. Through the state exchanges, where you pick government decided upon plans (yes, government picks what to offer), and we still have no idea what they look like. What will be included? What won’t be included? Is there a deductible? How much of your voucher will cover the plan cost? Who decides what gets paid? Who do you call? What doctor can you use? Is there even a network anymore? We don’t know any of that, and all of that is going to be a government decision. You WON’T be able to just talk to your HR person and have them help you through it, because they won’t be involved anymore.
Side note: I have it set up so people cannot copy and paste on my site because of plagiarism concerns with other bloggers. There was a real issue a few months ago with that in the blogosphere. Sorry about that. I’m just don’t like people jacking my thoughts.
Agreed. The majority of employers will cease to offer insurance for exactly the reasons you stated. This is what the supporters of this health care bill want. They had to eliminate the single-payer option to get the damn thing passed. This is just a back door way of making it happen.
Yes the system is broken, but taking away individual liberties is not going to fix it. Enact tort reform and let insurance companies sell across state lines. That will increase competition, and competition drives down prices.
Yes! Thank you, Lisa!
Bingo
I’m a state employee with state insurance. It is better than my last four previous employers. If everyone could have the insurance I have it would be awesome.
I think what we need to do in this country is model our healthcare after that of other countries with a good track record. My boss is from the UK and he loved the healthcare system there. I’ve also her great things about Norway and the Netherlands. Those countries are doing something right. Maybe because of my business background, but I think benchmarking is a beautiful thing.
Health care in The Netherlands is famous also in Europe because of its quality and good options. I live in Finland, where we have free healthcare that’s supposedly one of the best in the world. But that comes with a price tag: out of a Finnish median salary you pay over 20% taxes straight out of your paycheck (realistically you see about 70% of your salary on your bank account after all taxes and deductions). My husband for example gets a good salary (above median but nothing extravagant, just a professional’s pay), and we actually see around 61% of his salary. It’s harsh. Living costs are pretty high too, so while the government provides everything necessary, you have to have very high income to afford pretty much anything extra. Also, the daycare is cheap-ish and the schools are free, but the downside is that you don’t get to choose, it’s assigned. I’d take our system over the US one anytime, but just wanted to point out the other side of the story.
Straight tax is the way to go. I am a huge proponent for a flat tax system in the US. You make a lot, you pay your percentage. You make a little, you pay your percentage. It’s all the same percentage, there aren’t breaks or penalties for being rich or poor.
Don’t EVEN get me started on our public school systems. We have some pretty terrible ones here in the US.
Yup, in here there’s no way of getting rich by working. The more you make, the more you pay taxes, and you get nothing from the government. Those who make less (or nothing at all) are well taken care of, and this creates so so many problems that I won’t even get into because thinking about it makes me so frustrated I have to start drinking to calm down. It’s a system where no one is left behind (even though, believe me, people here complain a lot because apparently they aren’t being paid well enough to do nothing), and that’s a good thing, but at the same time it’s impossible to get wealthy by just working hard. But yeah, the healthcare is good, and if you get cancer the best available care in the world is there for you, and it’s free. Every pregnant woman and every child gets regular free check ups. It’s something to be thankful for, but I can see why this model would never ever work in the US. I have been keeping up with this discussion about healthcare there, and I really truly sincerely hope that while finding solutions to the obvious problems, they don’t dig another hole.
I hope we DO get the insurance state employees have. However, we don’t know what will be offered, just that different levels will be offered at the state exchange. The state will manage that, but if it will be the same insurance that’s offered to a government employee is unknown. Since it sounds like you can pick plans that they pick for you, I would say it’s not going to be the same. And since it’s managed by the state, it is unclear who you would go to for help when you need it.
I imagine, with your insurance, you still have an HR department through your employer that can guide you. If the employers don’t offer insurance, we can’t really guide anyone through the process. So how that will work is unclear.
What arebthe rules for companies with less than 50 employees?
The rules are different. My company is over 50 employees, so I am not well versed in them, but I think the penalties are different.
My husband’s employer has already said that it will drop our insurance and pay the penalties. I don’t have any insurance where I work, so our family is totally dependant on his insurance. My biggest concerns are what will those of us with “pre-existing” conditions have happen to our care? I have thyroid and other hormone issues that are being covered right now, but under the state exchanges, what kind of coverage will I have? Will I still be able to see my specialist? Will my meds that I have to take every single day still be covered? It scares the beejeezus out of me, because if I don’t have the medication and treatment that I need, my health will deteriorate tremendously, thus affecting my quality of life. I don’t like the thought of my State possibly having control over my quality of life just because it will only pay for what it thinks is necessary, and or only able to see certain physicians.
There will be no pre-ex in 2014 for adults. So that’s a good thing. I’ve always thought was dumb.
As far as the coverages, no one has any idea what will be available. They haven’t told us.
At least I won’t be rejected due to my pre-ex, but as far as everything else goes, and I know what a shit hole my state is in currently with not having enough money to cover many programs that our state currently offers (medicaid for example) is what scares the ever loving shit outta me! How on Earth can they afford health insurance for everyone, when the current budget isn’t even in balance? We just had several major clinics within our local “charity” hospital that had to close because they were no longer going to get proper funding from the state…so can you see my concern? Not to mention that lots of physicians are no longer going to accept programs like medicaid since the reimbursement rate they receive has been cut, so who’s to say that physicians will even accept this state exchange insurance if the reimbursement rate is not acceptable???
If it means that everyone has access to affordable healthcare I’m all for it. I don’t care if my insurance comes from my employer or the state. In fact, I think it’s ridiculous that healthcare is based both on employment and if your employer wants to provide you with any.
And, right now, I don’t get to pick my plan. You imply that having the government offer a list of choices is different from what happens now with employer-sponsored plans. I’m bound by what my employer offers. So when I recently switched jobs I had to pick 1 of 3 plans offered by my new employer, all provided by the same insurance company. And this company considers the other hospital system in town their preferred providers so I had to change all of our doctors. It’s not like that by the luck of being employed I’m guaranteed my pick of any insurance coverage I want. I’m not thrilled with my insurance (mine doesn’t cover contraceptive) but I don’t have a choice.
What we are seeing in these provisions are the big insurance companies at work. They demanded (and got, thanks to their political donations) critical mass. They got it by rules that make it fiscally better for everyone to be part of the exchange. Painful? Maybe. But change is never easy. Especially when things were allowed to get as broken as they are.
Well, there is the single payer health insurance. But that comes with a hefty price (the price your employer basically pays for you).
And I can’t argue that it should be affordable and available to all. Totally agree.
We don’t know if the state plans will cover certain things or offer certain networks (like your work one does now). There are a lot of unknowns. My MAIN concern is that people who do like their company health plans will be blindsided when they hear that it’s no longer offered and blame the employers.
Any way you look at it… the employers will be funding healthcare one way or another even if the reform goes through. We will provide it at work, or pay the penalties to provide it for everyone. So it’s still going to be coming back to the employers. The employers will just have to figure out what makes financial sense.
This is scaring the crap out of me even more. While I was so excited about the changes in the “pre-existing conditions” thing and extension to 26 yrs old for coverage of our kids, I was looking forward to our pending return to the U.S. (Been ex-pat for 10 yrs. now.) But when I went through the state picks list (for Texas) I was just freaked out. I kept searching till I found what I used to have when I was still employed and had benefits with D.O.D. (BC/BS PPO) and GACK!! $1000 PLUS per month for family coverage WITH a $2500 deductible. EXCUSE ME! But WHERE is the word “affordable” in all of this?? I may end up sticking it out here in the developing world where medicine is socialized and my 3 asthmatics and autistic kid have snowballs chance in hell of receiving health care at minimal costs AND still be able to eat.
I work for a state university. Our health insurance is okay, not great, the same plan as state employees. I guess what frustrates me the most is they raised our deductibles, increase our percentage of out of pocket costs, and told us it was to force us to be informed consumers. However, there is no way to find out what things cost before hand. There are so many variables. If I or my child get very sick, I don’t have time to call around asking how much a breathing treatment or fixing a broken arm costs before heading to the hospital. What has happened is that I have opened a health savings account, and have begun hoarding that money “just in case” and not getting some health issues treated.
I went to my endocrinologist for a follow up, and she was no longer on my insurance list. She let me pay her cash, and said the $90 I paid for the visit is what she would have made from the insurance company after all the discounts. And she didn’t have to pay her billing claims person to process it. I don’t know why more doctors don’t go the cash route, seeing how little they make on insurance and medicare/medicade. We need is a fee-market, transparent system, where consumers can make truly informed decisions. Like the commenter above said, let insurers sell across state lines. That would drive down the rates.
*medicaid
FYI, they JUST NOW upheld the healthcare reform law.
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