Smart Benefits: A Bad Week Brings Reactionary Changes to Obamacare

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Monday, November 25, 2013

Amy Gallagher, GoLocalWorcester Business/Health Expert

In an attempt to save Obamacare from a quick demise, the Obama administration is trying to adapt it by weakening the very law that created it. Below are some of the changes already underway or being considered to drive support.

Exchanges’ Enrollment Deadline Extended

Amidst crashes and lengthy waits on the state and federal exchange websites, The Obama administration last week announced that the December 15 deadline to enroll has been extended to December 23.

But while the administration claim websites’ malfunction is behind enrollment numbers that are way below expectations, critics argue the real reason for the shortfall may be that prices are too high.

Higher Penalties for Young Invincibles?

For one demographic, costs are likely the reason for the low enrollment: the twenty-somethings. This population has other appealing options:

• If they are under 26, they can stay on their parents’ plan
• They can take the low-cost penalty, which is much less than electing coverage

The young’s reluctance to enroll is a significant issue because the success of the exchanges is largely built on this population enrolling and offsetting the other older, sicker enrollees. As a result, last week, there was talk of increasing the penalties for this population by more than originally planned – and sooner, as early as 2015.

Terminated Plans Okay – For Now

Many existing plans for individuals and small businesses who are renewing coverage were terminated and replaced with new options that meet the essential benefits requirements under Obamacare. But amidst widespread criticism, the Obama administration has now delayed this provision for one more year until January 2015.

The issues with the extension?

• Insurers are regulated by the states and it will be up to the state insurance commissioners to decide whether to allow this delay. So some only states may allow it, while others will require renewing with the new plans
• The delay comes too late for most employers who have already made decisions about plans gone through the renewal process

Possible Exemptions for Unions to FTE Requirement

One of the biggest consequences of Obamacare is that employees are losing hours because of the pending definition of full-time status as 30 hours. Many employers who previously considered 35, 37 or 40 hours as full-time are now cutting hours to below 30 to control expenses by limiting those eligible for coverage.

The unions, the Obama administration's biggest supporters, are possibly the sharpest critics of this aspect of the law. To win back their support, the administration is now trying to exempt unions from inclusion of a new tax that goes into place in 2014 and gets assessed to insurers and self-funded employers. But that means the hefty fees ($63 per person per year) will get passed on through premium increases to everyone else.

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.

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