Putting up notice about ACA (published Sept. 25)
WASHINGTON — If you haven’t already, you will probably be getting a notice from your employer about the new health insurance marketplaces through the Affordable Care Act.
The notices, which are required by the health care reform law but carry no penalty if employers fail to provide them, are seen as just one more way for the government to get the word out about the marketplaces, which open Oct. 1.
Herbert Egert wants to do the right thing by his employees, so he’s working on his notice. Egert runs a small group dental practice in Maryland that has long provided health care coverage to many of its employees. All of the practice’s employees who work at least 24 hours a week have medical insurance — two through Medicare, one through a parent’s insurance policy, and five who are covered by their spouses’ plans. The remaining nine employees are covered by the practice.
“We pay 85 percent of individual coverage, which works out to 70 percent of parent plus child, 60 percent for a husband and wife, and 50 percent for family coverage,” said Egert, managing partner of Affinity Dental Associates.
Here’s Egert’s dilemma. The insurer covering his employees offered to renew the contract, which ends in March, by the end of December. Egert believes the early renewal proposal, which came with a 32 percent increase, was a move to keep his employees from seeking coverage through the marketplaces.
“I think this offer is just an attempt to take advantage of Obamacare paranoia and that we will be able to do better with the exchanges,” he said.
As a small employer with 50 or fewer full-time employees, Egert may be able to provide group coverage through the Small Business Health Options Program Marketplace, and possibly receive a health care tax credit worth up to 50 percent of premium costs. The small business exchange was slated to open up for online application on Oct. 1, the same day as the opening for the individual marketplace. However that service won’t be available now until November. Business owners can still apply by phone, mail or fax.
Egert doesn’t know what to tell his employees. They may do better in the exchanges, or they may not. Until open enrollment starts, people can only guess what’s best.
“What do you think I should indicate in the letter to the employees?” asked Egert, who has been my dentist since I was a young adult.
I told him to lay out all the options he’s considering for them. When I consulted government officials, they said the same thing. “Employers shouldn’t worry that they will be locked into any future benefits coverage because of this notice,” said Phyllis C. Borzi, assistant secretary of labor for employee benefits security.
The Labor Department has created template letters that employers can use as a model to send to their employees. One letter is for employers who currently offer health insurance, and the other is for those who don’t.
If the Fair Labor Standards Act covers your company, your notice should at least include the following:
— Information about the health insurance marketplace, where you will be able to shop around and compare plans sold by different insurance companies.
— You should be told that, depending on your income and what coverage your employer offers, you may be able to get lower-cost private insurance in the marketplace.
— If you buy insurance through the marketplace, you may lose your employer contribution to your health benefits, if there is one.
— If your employer offers health coverage that meets certain standards, you will not be eligible for a tax credit.
— If your employer does not offer health coverage, your letter would point out that you might be eligible for a tax credit that lowers your monthly premium.
— If the cost of an employer plan that would cover you — not including other members of your family — is more than 9.5 percent of your household income for the year, or if the coverage your employer provides does not meet the “minimum value” standard set by the Affordable Care Act, you may be eligible for a tax credit.
As I told Egert, just be upfront with your employees. If you aren’t sure what will work best, then say that. He’s got some time to decide. Open enrollment in the individual marketplaces begins Oct. 1 but doesn’t end until March 31. Regardless, Egert said he isn’t changing his commitment to his employees to provide quality health care.
“Most of my staff are confused by and afraid of the ACA calculators that are out there,” he said. “I have already told my employees that we will play it by ear, but we still intend to supply insurance that is at least as good as what they have now.”
Long-term care — the missing link (published Sept. 22)
I suspect many people didn’t know that the Affordable Care Act, or Obamacare, was supposed to include much-needed coverage for long-term care.
Ironically, the enacting legislation was called the Community Living Assistance Services and Supports (CLASS) Act. But what happened to an initiative that was meant to address what is certainly going to be a huge financial burden for families as the population ages isn’t classy at all. It’s sad.
The CLASS Act envisioned an insurance program administered by the federal government that would cover long-term care. Medicaid is now the only federal program that extensively deals with these services. But to qualify for the benefit, you have to be pretty poor. Medicare, except in very limited situations, does not cover long-term care, which includes assistance with daily activities such as eating, dressing and bathing, or help with someone who has a severe cognitive impairment such as Alzheimer’s disease.
Under the CLASS Act, premiums would have been paid through payroll deductions by employees who decided to participate in the program. Participation by workers would have been voluntary. So participants, not the taxpayers, would have covered the cost. If you were self-employed or your employer chose not to participate, you could have participated through a government-sponsored payment mechanism.
The program promised to provide lifetime cash benefits of at least $50 a day to people with disabilities to help with the costs of long-term services and support. The idea was to keep them in their homes and communities, if possible.
I’m speaking in the past tense because there is no more CLASS Act. The Obama administration abandoned the idea because there was great concern that the voluntary nature wouldn’t make the program actuarially sound. There was fear that the people who needed the insurance the most would pay but others who didn’t would opt out. Premiums in turn would be too high. If the insurance program became financially unstable, there would have been great pressure for the federal government to bail it out.
So what was put in its place?
Specifically, the Commission on Long-Term Care, which didn’t have long to grapple with this issue — from June until this month. It was charged with developing “a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system” that would provide long-term services and supports to elderly individuals, individuals with substantial cognitive or functional limitations and others who need assistance to perform activities of daily living.
The commission recently issued its report and recommendations on the looming long-term care crisis. The commissioners, at least those who voted to deliver the report to Congress, concluded that the long-term services and support system as it currently operates in this country “is not sufficient for current or future needs.”
I’ll give them this. The report lays out the problem well. Basically, individuals in need of services often don’t have enough money to pay for long-term care. They mostly rely on family and friends who often are also at their financial wits’ end. Caregivers are overburdened and underpaid. If we don’t figure out how to address this issue, the situation will get worse.
“With little time and in today’s politically charged environment, it was unlikely the commission would achieve anything more,” said Jesse Slome, executive director of the American Association for Long-Term Care Insurance. “Those anticipating significant changes or a recommendation for a new taxpayer-supported social insurance program to address long-term care may be disappointed.”
And many people were disappointed. The report was passed by a 9-6 vote. Five commissioners were so dissatisfied with what was put forth that they issued a separate statement about why they didn’t vote to support the report. Judy Feder, who served on the commission and is an Urban Institute fellow and professor at the Georgetown Public Policy Institute, is not happy.
People can’t plan for an unpredictable catastrophic need such as long-term care unless they have an insurance mechanism, Feder said. The five commissioners issued their own recommendations calling for a public social insurance program.
“What we need is a public insurance core that can be supplemented with private insurance and family care,” Feder said. “The question is, are we going to meet the needs of a growing population or are we going to leave them hanging?”
If all goes as planned, the Affordable Care Act is expected to usher in huge changes to the nation’s health-care system. Part of the reform should have and still needs to include a solution to deal with the looming long-term care crisis.