The projected county employee health insurance rates, coupled with still more questions than answers about the new federal health care laws, often referred to as “Obama Care”, has put members of the Clinton County Fiscal Court in a position of having to explore “all options” prior to the current health plan expiring at the end of March.
Judge/Executive Lyle Huff and the entire fiscal court were braced to hear negative news about the new proposed health insurance rates at its February meeting last week, and the news given by their insurance representatives, Grady Wilson and Marcy Johnson, with the county’s current provider, Bluegrass Family Health, in fact estimated the increase in rates for the next year would be 49 percent.
Both Wilson and Johnson concurred that a major reason for the much higher than expected increase was due mostly to a handful of “major” claims paid out by the company–with four claims alone totaling over $285,000, and that was just over the first nine-month period of the one-year policy. Those cases, Johnson added, involved cancer patients or individuals with cardiovascular problems.
The county has around 55 total employees (including a few family members) covered under the insurance plan and it was noted that in all cases of group insurance, about 20 percent of those covered use about 80 percent of the total premiums paid out during a year.
Wilson said the expected average increase in rates is about 14 percent, a figure that most court members were expecting to hear.
Both magistrates, Ricky Craig and Patty Guinn, said they had never heard of such an increase, but Johnson also said the situation may even be worse next year (when the 2014 renewal comes up.)
Wilson told the court that even if they had kept Anthem insurance, the results would have been the same. He said the unexpected high payouts coincided with the time the county switched to Bluegrass Family to provide the insurance to its employees.
Several questions then arose about Obama Care and the effects it may have, not only on Clinton County, but all county governments and businesses.
Some questions pertained to whether or not it would be cheaper on counties or small business to simply not offer employee health insurance and pay the per employee penalties that are attached to the new health care laws.
The new health care bill will also have an ‘exchange’ program that individuals can opt into, but still there seems to be more questions than answers on how that is going to work, as well as the associated cost.
Wilson, in discussing the new health care bill, said, “I’m not aware of any waivers…but there are a lot of penalties.”
In relation to full-time jobs being dropped to 30 hours, it was inferred that some companies may begin offering mostly part-time jobs to cut down on the penalties they would have to pay by not offering insurance. “Full-time jobs might become a thing of the past,” injected magistrate Mickey Riddle.
Wilson said the county could go with different plans, or “mix and match” to try to cut down on costs by offering two different plans.
Magistrate Craig noted that some healthy individuals could probably get insurance cheaper by buying their own policy. Wilson and Johnson both agreed that soon, however, although the cost for most elderly people (for health insurance) would decrease somewhat, it would likely raise the cost for younger people who want health insurance coverage under the new health reform.
Judge Huff gave his own opinion of Obama Care, saying, “it’s against small business and it’s against free enterprise.”
Huff further recommended that due to the economic effects a 49 percent hike will bring, as well as the still uncertainty of the added burden of Obama Care, that the court table the issue of employee health insurance and take time to study the situation and explore all options.
Magistrate Craig made the motion to table action, which passed by unanimous vote.
In a letter to Judge Huff earlier from Wilson, of Crabtree Wilson Insurance Agency, Inc. of Whitley City, which was distributed to court members, it outlined some provisions under the new Health Care Reform, as follows:
“Starting next year in 2014 as a result of Health Care Reform, there will be penalties imposed upon groups if they do not meet certain benchmarks. First, there is a $2000 per employee penalty if a group does not offer coverage to its employees. Please note the $2000 is assessed per full-time employment. Federal law will make 30 hours its minimum full-time. So, all employees working 30+ hours will be considered full-time and assessed the $2000. Also, the rules state that a number of part-time employees under 30 hours would count towards the full-time mark. For example, three employees working 20 hours each would equal two full-time employees working 30 hours each. (There is a stipulation that the first 30 employees counted would not count towards the penalty. So, if a group had 100 full-time equivalent employees, that would be 100 minus 30, or 70 employees. Those 70 are the ones charged the penalty.) Also, when the penalties are calculated, they will be looking at employees and hours worked in 2013.”
Then, there are penalties involved even if you do offer coverage to employees.
* If coverage does not meet a certain threshold (what will be called Essential Health Benefits, or EHB), a group could be charged up to $3000 per employee.
* If the employer’s contribution for coverage exceeds 9.5 percent of their income, the employer could be charged up to $3000 per employee.
* If an employee decides to come off the group plan, enroll with an insurance exchange (online insurance supermarket, if you will), and receives a subsidy from the government based on income; the employer could be charged up to $3000 per employee who does this.
As you see, even if an employer still offers coverage, there are fines that can still be leveled against the group.”
The letter also reminded court members that, “Please keep in mind, these are rules put forth by Health Care Reform; these are not the insurance company’s rules.”