Participation in 2014

[somarco]

I see no reason for an employer with fewer than 50 lives to offer group health insurance. If they want to provide a benefit, they can establish an HRA. It is possible some firms with high paid white collar employees might establish or enhance other areas of employee benefits, including ancillary lines and retirement plans.

 

[ABC]

I think we will see a mass exodus from the small group market.

All of the big broker houses are running from groups under 100 lives.

Unless the pooled/community rating lower group rates, I see 80% of small group owners dropping.

There is BS going on about defined contribution on a group platform. Unless the base plan is QHP this will not work.

The successful small groups will have to continue to invest in the employees with a group benefits to retain talent.

The blue collar groups that deal in prevailing wages will also have to keep a group health plan.

 

[Sam]

The blue collar groups that deal in prevailing wages will also have to keep a group health plan.

Absolutely! The prevailing wage and SCA markets are a great growth area worth focusing on. Lots of ways to make money and they have their own separate "penalty" if they drop coverage.

 

[somarco]

BS going on about defined contribution on a group platform.

I assume you are referring to limited benefit plans . . .

What are SCA markets?

 

[Ann H]

I agree that a huge portion of the small group market will end abruptly. However, I have groups with less than 50 EEs that fully intend to keep the group plan. Some need to attract & maintain talent, some need to stave off the unions. I have a group of civil engineers that knows most of their employees won't get a subsidy due to combined income of spouses. Same thing for some lawyers I insure and a group of IT techs. I have an Electrical District that must keep group insurance because it's expected in their industry. And I have a few Mom & Pop groups that insure so many family members (and pay them above-subsidy wages), that they want to keep the group plan. However, I expect about 80% of my small groups to implode.

 

[ABC]

I assume you are referring to limited benefit plans . . .

What are SCA markets?

There is going to be small group products that have a multiple choice options for the employee. Similar to what UHC does to day.

So the employer will determine what the defined contribution is going to be for each employee. Then the employee can choose whichever plan they want. The idea behind this is the employer will pay the majority of the cost for the base plan. Then the employee has the option of buying up to higher coverage.

The concern is that the base plan will not be QHP, thus making the employee eligible for the exchange and a $3,000 penalty to the employer.

This market approach is to get the employer away from absorbing rate increase. Once we see the pricing on these plans then we will know.

 

[somarco]

Yes, that is one of the theories batted around. Who knows if it will work or not?

I do believe the HRA will be the funding vehicle for many small employers (and some large as well). Give the employee $100 - $200 per month and go find your own coverage. Employers may include some voluntary benefits (dental, vision, disability, etc) but I think the traditional group major med for under 50 lives is DOA come 1/1/2014.

Larger employers are already exploring payroll shifts to less than 30 hours to avoid paying for Obamagroupmed plans. No doubt all this is counterproductive to what the regime wanted or expected. They anticipated states would flock to establish the exchange, states would roll over on Medicaid expansion, religious groups would have no problem paying for birth control and employers would continue to offer traditional group health insurance plans.

Seems they miscalculated . . . big time.

 

[Ann H]

One of the reasons HRA's may be the only viable avenue for 90% of employers with less than 50 employees is because of one subsidy rule. It's the rule that disqualifies a person and their whole family for a subsidy if they are ELIGIBLE FOR their employer's group health plan where the premium is "affordable" for the employee (whether or not it is affordable for the dependents). Unless HHS decides to pull the rug out from under employers, an HRA may be a way for the employer to still fund a portion of the premium (tax-deductible to the ER and tax-free to the EE), while not disqualifying that employee (and the employee's dependents) for subsidies.

 

[insurehound]

ABC, what does prevailing wage have to do with a Group keeping coverage. I have a small group who uses prevailing wage. What would stop them from giving their employees money to buy it on their own?

As far as keeping and recruiting talent, couldn't a group accomplish this by just giving money to employees so that they can buy insurance for themselves? Or is the power of employer-sponsored coverage being that they have someone to help the employees make their health benefit plan choices, etc.?

 

[Sam]

SCA stands for service contract act. There are several types of employers who do work for the us government, or states and municipalities, that need to comply with laws such as the Service Contract Act, Davis Bacon, or state prevailing wage.

For example, any federal construction project requires that the employees of the contractor be paid the prevailing wages.

In many, although not all of these cases, they are required to pay a base and a fringe rate that exceeds their shop rates (what they usually pay the guys) If they pay for their employees to have health insurance, they can take credit off the remaining fringe they owe the employees. If they do not, say they just pay a penalty instead, then they still have the full fringe obligation.