HEALTH REFORM: Expect Pluses, Minuses for Those With Job-Based Coverage
Day two of a five-day series
TUESDAY, Sept. 24 (HealthDay News) -- The Obama administration's sweeping health reform law known as the Affordable Care Act goes well beyond helping America's uninsured. It also affects roughly 159 million workers and family members who now have job-based health coverage.
If you have an employer-sponsored health plan, you satisfy the law's "individual mandate" that requires most people to have health coverage or pay a fine. And because of the health reform law, sometimes known as "Obamacare," your job-based health plan may include new insurance protections and benefits.
Beginning in 2014, for instance, the reform package prohibits employer-sponsored health plans from excluding people from coverage based on pre-existing health conditions.
It also makes larger employers responsible for offering medical coverage. Beginning Jan. 1, 2015, businesses with more than 50 workers must offer health insurance to full-time workers and dependents or pay penalties. The Obama administration recently delayed the "play-or-pay" mandate, originally set to take effect Jan. 1, 2014, to give employers more time to work through federal rules and reporting requirements.
The health reform law also creates several new insurance protections and benefits for people with job-based coverage. For example, if your health plan had a lifetime limit on health benefits, that's history. And annual limits will be banned completely in 2014.
"Some employer plans had lifetime coverage limits, usually capping out at $1 million, but some were as low as $750,000," said Dr. Alan Spiro, executive vice president and chief medical officer of Accolade Inc., a Plymouth Meeting, Pa.-based company that helps employees and their families navigate the health-care system. "These limits often spelled financial ruin for families during catastrophic medical events," he added.
Also, if you have an adult child under age 26 and your employer health plan offers coverage for dependents, the plan must allow your son or daughter to enroll. Spiro called that "a huge blessing for families" with young adult children. "In this difficult economy, many college graduates were struggling to find employment and losing benefits simultaneously," he said.
The law also requires most employer health plans to offer certain preventive services at no cost to the employee.
"Hopefully, that's an incentive that gets a couple of us couch potatoes to the doctor," said Bill Kaiser, area vice president of sales and marketing for the benefits consulting firm Gallagher Benefit Services.
The law also encourages workplace wellness programs that promote healthy behaviors. You can earn rewards (or face penalties) based on whether you achieve certain results, like lowering your cholesterol, or participate in specific wellness activities. Effective Jan. 1, 2014, the law allows employers to boost rewards and penalties (such as premium discounts or surcharges) to 30 percent of the total plan premium, up from 20 percent.
Law already bringing changes to insurance options
But the law is also prompting changes -- some intended, some unintended -- to employer health plans and employment practices, analysts say.
"The ACA (Affordable Care Act) is hastening difficult decisions employers have to make with how they provide health care to their employees," said Kaiser.
For instance, one in five employers has boosted employees' share of health plan premiums, while one in four intends to do so over the next year, according to the International Foundation of Employee Benefit Plans' (IFEBP) 2013 employer survey. And one in three employers is increasing employees' share of dependent coverage costs, the survey also found.
Scrambling to offset rising health expenses, many employers are getting aggressive. Employees can expect higher premiums, steeper out-of-pocket costs and a continuing migration to high-deductible health plans, among other cost-shifting measures.
"An employer might have to make certain decisions to contain costs, and this is not necessarily only a result of the Affordable Care Act" but the upward trend in health-care costs, explained Mandy Bartoshesky, area senior vice president and compliance counsel in the Philadelphia office of Gallagher Benefit Services, a provider of employee benefits consulting services.
The Affordable Care Act is "shaking things up," added Kevin Flynn, president of Philadelphia-based HealthCare Advocates, which helps consumers resolve health insurance problems. "I think at the end of the day, everybody's going to be paying more," he said.