December
10, 2014
In
many ways, 2014 was a pivotal year for PPACA, as most major reforms came online
in the past 11 months. Among the facets implemented were the Health Insurance
Tax, subsidies, state and federal exchanges, minimum standards, health care
co-ops, Medicaid expansion and new rules for wellness
programs, minimum waiting periods and several market reforms.
There
were lots of problems, and the government tacked on plenty of last-minute
changes and extensions in an effort to smooth the implementation. It all
resulted in a flood of negative press for PPACA. Public
perception has fallen so far that polls now consistently show
that around 60 percent of Americans don't favor the law.
It's fair to say that
health care workers, insurance brokers and agents, consumers, government
regulators and President Obama hope 2015 will unfold more smoothly. On tap for
next year is a relatively minor facet of PPACA set to start on Oct. 15 — a 23
percent increase in the Children's Health Insurance Program match rate up to a
cap of 100 percent, according to the Kaiser Family Foundation.
The main issues for
Obamacare in 2015 revolve around how employers and benefits professionals
handle the employer mandate and related compliance issues. Also on their plate
will be working with employers and employees struggling with canceling policies
or canceled policies as extensions lapse. And there are tweaks coming for the
state and federal exchanges, too.
Already
delayed multiple times, the employer mandate
— a critical part of the law's success — is set to begin in 2015. That means
employers with more than 100 employees must offer health insurance by January
or pay a fine of $2,000 per worker. Companies that employ 50–99 workers have
until January 2016 to begin offering health insurance. (Companies with less
than 50 employees are exempt.)
“The employer mandate is
coming in 2015, and employers need to be preparing for it,” says Jessica
Waltman, senior vice president of government affairs at the National Association
of Health Underwriters in Washington, D.C. “Employers need to be acting right
now and making coverage offers for Jan. 1. Those decisions need to be made
now.”
Compliance
With new employers entering the health care
marketplace because of the mandate and because the time frame to phase out
noncompliant plans will expire, benefits professionals in 2015 will
increasingly be called upon to help clients come into compliance with PPACA.
“Most of the requirements
were effective for 2014, but because of the way the administration allowed
states and carriers to continue with noncompliant plans for another year,
there's variability across the country,” Waltman says. “So you have some
employers who are compliant and other employers working on becoming compliant.
They have to document. It's not just ‘I don't have to do it this year’; it's ‘I
have to fill out and document it.’ A lot of employers were already offering
coverage, but the new systems in place are a compliance burden that may be as
much work as offering coverage in the first place.”
But compliance hasn't
been easy, some industry insiders say, as employers have been fearful over the
law's penalties and continuing changes. Aaron Davis, president of NextLogical
Benefit Strategies in Westminster, Maryland, says brokers have been busy
working to educate clients — as well as ease their concerns.
“What's happening is
PPACA is just loaded with fear-inducing issues. So employers are freaking out,”
Davis says. “Plus the law has changed 30–40 times so far, so everyone is asking
if they’re in compliance. In health care, we call it the worry well. It creates
stress, so brokers use that and deluge people with information. Within 24 hours
of a change, we get the information. We keep up on it, but clients continue to
freak out because they’re scared of missing something. The IRS went out and
hired a bunch of new auditors last year and started auditing health plans. And
those penalties can be huge. People are going to continue to peddle fear and
offer hope.”
Exchanges
Benefits professionals
and consumers will continue to see change in the federal and state exchanges as
well. Some exchanges were really clunky and inefficient, like Oregon's Cover
Oregon. Others seemed to work better, like Kentucky's Kynect. And no one needs
to bring up the subject of the federal exchange on HealthCare.gov. Still,
benefits professionals working with state-run exchanges question whether the
marketplaces will continue to improve in the next year.
“I haven't had a new training on the new
exchange website in Kentucky,” says Zach Zinser of Zinser Benefit Service in
Louisville, Ky. “We’ve just been told, ‘You’ll want to re-enroll your clients
in it.’ I’ve contacted my clients, and I’m telling them I’m aware of what's
going on. I don't know how much they believe me or I believe myself, but I’m
doing what I can.”
NAHU's Waltman adds that
some states will complete their exchanges in 2015, while other states, such as
Idaho and New Mexico, will launch completed state exchanges to take the place
of federal-state hybrids created for 2014.
According
to the federal government, another 2015 change will be an increased number
of carriers offering plans on the exchanges. The U.S. Department
of Health and Human Services said in a September statement that the number of issuers will
increase by 25 percent — with 77 new issuers. The federal
exchange will have 57 more issuers by itself.
“When consumers have more
choices, we all benefit,” HHS Secretary Sylvia Burwell said in a press release.
“In terms of affordability, access and quality, [the news of more carrier
participation] is very encouraging. It's a real sign that the Affordable Care
Act is working.”
Even with all those new issuers, though,
benefits professionals may not be getting all the information they need from
insurance companies to help service their clients correctly and efficiently.
“As of right now, I’m
pretty disappointed in the insurance companies,” Zinser says. “On the
individual side, we’ve had one meeting with them. We’ve gotten some guidance
from Anthem on what they’re doing and moving people to plans. But who's going
to be gone and who's not going to be gone? Last year, we had a lot of renewals.
In some of my states, like Indiana, they’re discontinuing some plans and
rolling them into a new plan. Humana — one of the major carriers in the
individual market in Kentucky — hasn't told us anything at all. I’m hugely
disappointed. There's been no guidance. We had a webinar and they let us know
renewals are coming soon. That's where I stand right now.”
Rates
There's
no easy way to sum up what will happen
to rates — they’re going to go up for some consumers and they’re
going to go down for others.
“My guess is that
employers will continue to reveal to employees what the law is costing them,”
Davis says. “We’ve got clients right now — midsize clients — that are paying
$100,000 per year in fees. One of our clients went back and said, ‘We want to
tell our employees what it's costing us.’ The singles were paying an extra $150
per year for single coverage and around $650 per year for a family. Employers
are saying, ‘We want people to know what this is costing.’
“My customer-service
people spend more than half their time on [PPACA] issues,” Davis adds. “You
take a broker business that used to be profitable, and you take that staff and
50 percent of their time is spent on compliance. You have to ask yourself
what's not getting done — and that's all the really important stuff we do to
help our clients control spending.”
Cancellations
Throughout 2014, there
were plenty of stories concerning plan and policy cancellations. Politifact
even called President Obama's sales pitch — “If you like your plan, you can
keep your plan” — the lie of the year in 2013. In 2015, the tide of
cancellations isn't likely to subside as prices increase or employers stop
offering health insurance altogether.
“All of these people
right now are getting renewal prices for 2015, and the rate increases are
enormous,” Waltman says. “Since small employers and large employers are
starting to comply, employers are also making switches. They may no longer
offer coverage to spouses or they may no longer offer coverage to part-time
employees.”
Davis agrees, saying he
thinks cancellations are going to continue.
“That's part of what's going to drive
individuals to the exchanges,” he says. “Now, while it's a minimal fine for not
doing it, that's going to increase over time. The IRS is going to look at that
over time, too. I would say you’re going to see more cancellations and groups getting
out of the business of providing health care.”
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