It's health plan open enrollment season for many employees, including federal workers.The editors of the Consumer Checkbook's annual Guide to Health Plans for Federal Employees join us to discuss what you need to know to make smart choices for 2016.
Last week the Obama administration announced a delay in the implementation of a key provision of the Affordable Care Act. Business owners with at least 50 employees will not be required to offer health insurance until 2015, a one-year delay that the administration says will give employers time to implement complex provisions of the law. The move has provided fuel for critics of the health care mandate, who say this is further proof the law is unworkable. We explore which other provisions of the law are affected, and what it means for consumers.
- Julie Appleby Senior Correspondent, Kaiser Health News
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, Prince George's County plans to make over the area around three metro stops with more condos, shops and restaurants.
MR. KOJO NNAMDIBut first, last week the Obama administration announced a delay in the implementation of a key provision of the Affordable Care Act that companies with at least 50 employees offer healthcare coverage. Those companies will now have another year until 2015 to provide coverage if they don't already offer it.
MR. KOJO NNAMDIThat gives them an extra year to work through what many employers say are complicated provisions. The delay however is fueling critics of the healthcare law who say this is further proof that the law is unworkable and it's also creating confusion for consumers, who wonder what exactly this means for their health coverage.
MR. KOJO NNAMDIJoining us to discuss this is Julie Appleby. She reports on the health law as a senior correspondent for Kaiser Health News that's an editorially independent program of the Henry J. Kaiser Family Foundation. Julie Appleby joins us in studio, thank you for joining us.
MS. JULIE APPLEBYThank you for having me.
NNAMDIIf you have questions or comments about this, do you work for a smaller company that does not offer health insurance? Does it concern you that coverage by larger employers will be delayed for a year? Give us a call at 800-433-8850, that's 800-433-8850 or send email to firstname.lastname@example.org. So Julie, what provisions are being delayed and what will go forward?
APPLEBYWell, this caught a lot of people by surprise last week. We thought it was going to be a slow news week and then late in the day on Tuesday the Obama administration came out and said that the provision that requires employers to offer coverage or pay a penalty fine would be delayed for a year and that also delays the reporting of that.
APPLEBYSo this is one of the provisions in the law, it's one of the key provisions but it's not the only one. a lot of other things are still going forward but this does say that those penalties which are at least $2,000 per employee if you don't offer coverage will not be enforced in 2014.
NNAMDIWhat was the reason given by the administration for the delay?
APPLEBYThey said it was to give businesses a little bit more time to figure out how to do this, how to work it all. They'd been coming under a lot of pressure from what I've reading from the business community because the rules, all the final rules are not out yet. I think businesses were confused, there was a lot of things going on.
APPLEBYThey said that they wanted more time and the Obama administration has given them another year.
NNAMDIOpponents of the healthcare law have jumped on this announcement, what are they saying?
APPLEBYWell, they're certainly saying this shows that perhaps the law is not going to work as planned. There's been questions raised about other aspects of the law. Will these new marketplaces open on October 1st as they are scheduled to do? Are there any other delays or surprises coming?
APPLEBYSo the opponents of the law do say that this is an example of how the law is not going to work, that there's problems. The supporters however say that this is just an opportunity to give businesses and others a little bit more time to get this together.
NNAMDIOf course this is a hugely political issue in this political town. There are midterm elections coming up in 2014 then of course another presidential election in 2016. what are the implications posed by this delay?
APPLEBYYou know, there's a lot of them for the Democrats and the Republicans because you've got the midterm elections coming up and that's November next year. these provisions all go into effect January 1st for the most part. So look, you're still required to have coverage, most Americans are going to be require to carry coverage or face a fine. there's a lot of new rules...
NNAMDIBecause some people hear that the key provision of the healthcare law is delayed and they assume it includes the individual mandate that everyone is required to have health insurance, not so.
APPLEBYRight and it does not so that's going to be in place. That's going to have some time to work out. There's other provisions that are already in place and new ones that go into effect. There's a lot of new rules that go on insurers starting January 1st.
APPLEBYThey can't, for example, tell people who have a medical condition that they offer them coverage. If somebody has a medical condition and they apply coverage they can get it. So these rules all start in January so some of those will be in place but the businesses have been concerned that this is going to be very difficult and unworkable for them.
APPLEBYSo this puts off for another year pass that election period the concerns and complaints perhaps from some of the businesses.
NNAMDIIf you have a comment or question, call us at 800-433-8850, do you own a small business? Do you have any concerns about the healthcare law one way or another? Will this delay affect your business in any way? Give us a call, 800-433-8850. Our guest is Julie Appleby, she reports on the health laws, a senior correspondent for Kaiser Health News.
NNAMDIYou can also send us a tweet @kojoshow or email to email@example.com. For those with health coverage now, how will it affect out of pocket expenses, something the healthcare law addresses?
APPLEBYWell, this particular delay of this provision won't necessarily affect the out of pocket costs but the law does have a provision that limits the total amount of out of pocket that can be sold in coverage through these new marketplaces.
APPLEBYAnd that limit is about $6,300 for an individual and about $12,700 for a family, which is still a lot but it's less than what some people currently purchase on the individual market.
APPLEBYNow, there are also some rules that affect small businesses so they can't have a deductible that's higher than $2,000 a year for an individual or $4,000 for a family under the new rules. But that as far as I know is still going to be in place. So some of these things will affect the out of pocket costs but the actual delay of the employer mandate won't have a direct impact on that.
NNAMDIThis affects companies with 50 or more employees but apparently the definition of a full-time employee is not that clear. Can you explain why that's more complicated than it sounds?
APPLEBYThat's more complicated than it sounds because they've determined that a full-time employee is somebody who works 30 hours a week or more. So there's been a lot of debate about how do you count that? How do you count somebody who works 30 hours one week and maybe 20 the next and maybe 50 the next?
APPLEBYSo there's been a lot of discussion about what is a full-time employee and they've determined that it's at least 30 hours a week and employers get to pick at least three months in as many as 12 consecutive months to determine who is a full-time employee.
APPLEBYSo conceivably you could have a temporary employee who works for you for 11 months and maybe they're full-time but you don't count the 12th month. The bottom line is a lot of temporary workers will probably not be considered full-time and one of the concerns of businesses have raised is that they are going to drop people's hours below that 30 hour limit to avoid offering coverage.
APPLEBYIn which case, of course, those people could go to these new marketplaces and purchase their own insurance possibly with a subsidy but nonetheless they wouldn't be considered a full-time worker at their employer.
APPLEBYA couple of Congress people have introduced a bill that would require a 40 hour work week be the standard rather than the 30 hour, it's not clear if that bill is going to advance but that is in the mix of discussion at the moment.
NNAMDI800-433-8850, were you planning to buy health insurance on a healthcare exchange next year? Give us a call, 800-433-8850. Julie Appleby, who is likely to be affected by this law, large employers and the people who work for them?
APPLEBYYou know, it's really going to vary. Most large employers offer coverage, in fact, 95 percent of businesses with 50 or more workers already offer coverage. So that's a pretty big percentage and then below 50 workers, they're exempt from this provision. So it's a fairly small number of employers that were affected by this particular provision of the law in the first place.
NNAMDIHave employers, as far as you know, been downsizing in response to this law coming down the pipe?
APPLEBYYou know, we've seen a lot of media reports and anecdotal things about employers who are reducing hours. There's been a number of universities and school districts who say that they are going to reduce adjunct professors hours or substitute teachers hours so they're below that amount.
APPLEBYWe've heard some of the same thing from the retail industry. I think we won't know until we see it so I think there's a lot of talk about that. Some of the coverage I've read in the last couple of days has said that people are hoping that employers that were considering dropping people's hours will now wait and take a more wait and see approach, let it go for another year. I think some employers are already putting these plans in place, however, so it's not clear whether they will drop those hours or not.
NNAMDIHere is Jocelyn in Washington D.C. Jocelyn, you're on the air, go ahead please.
JOCELYNThanks for talking my call Kojo.
JOCELYNI wanted to find out, just kind of taking a step back from this topic, why do we have an employer based health insurance system in the first place? And in this era when so many people consult and people change jobs a lot and kind of, the jobs you were just talking about.
JOCELYNWouldn't it make sense to move away from an employer based health insurance system and also did that topic even come up during the negotiations around the Affordable Care Act?
NNAMDIWell, there are 535 people in the Congress of the United States and, yes, this did come up. There were comparisons made to the system of healthcare in Canada, system of healthcare in Britain and Julie Appleby can tell you more about this than I can.
APPLEBYYou know, there's a real interesting history to this. After World War II there were wage and price controls and other things like that and employers were looking for ways to offer their workers more benefits as a way to attract and retain them.
APPLEBYAnd so that's how our employer based system got started whereas other countries went to more a national health plan type system. We went with the employer based. It was a way to offer people some benefits. That's continued along although we have seen a steady decline in overall percentages of employers who offer coverage.
APPLEBYSo that was discussed during the debate and one of the things that this law does now is open up that individual market, it's going to make it easier for people to buy coverage on the individual market. So some folks have speculated that over time more employers will drop coverage and will send their workers to these marketplaces where they can pick and choose their own.
APPLEBYThe flipside of that is, employers still see this as a way to attract and recruit employees. So whether or not they drop coverage we'll have to see but that's sort of historically how we got started and how we differed from Europe and Canada and some other places.
NNAMDIJocelyn, thank you very much for your call. We got an email from Jonathan who wants to know, "Why was this allowed to happen when everyone knew about dates and deadlines a long time ago?"
APPLEBYWell, that's a very good question. I think that they have many, many moving parts that they are putting together in this law and there's been some criticism that not all the rules and regulations have come out in a timely enough fashion for employers and others to pull all of this together.
APPLEBYNow, the reasons for that may be varied and complex but I think that they knew these deadlines were coming and they just weren't able to get all the final rules out and they had a lot of pressure from the business community who said, hey it's going to be hard to track these workers, how do we track these variable hour workers?
APPLEBYCan we discuss more about this 30 hour rule? That type of thing. So they saw this deadline coming and they said you know what, we're not going to be able to meet it.
NNAMDIIf you can go to our website, kojoshow.org, you can find some frequently asked questions about the delay announced by the administration and the healthcare mandate? What does this delay mean for the new healthcare exchanges, Julie?
APPLEBYThere's been a lot of discussion about whether the federal marketplace which will be covering many, many states will be open on time and the federal government has said it will be. It'll start opening for enrollment on October 1st. The states that are doing their own including Maryland and the District of Columbia say that they will be ready on time as well.
APPLEBYThis, we have no reason to think that they won't be ready on time but everybody is saying that there'll probably be a few bumps in the road as this gets started. But nonetheless, if all goes according to plan these will open and people will be able to go to these marketplaces online.
APPLEBYIf they don't have an offer of coverage from their employer or if that coverage is considered unaffordable they can see if they qualify for a subsidy and these subsidies are going to be in the form of tax credits that will offset the cost of premiums and the subsidies are available to people who earn up to 400 percent of the federal poverty level and that's about $45,000 for an individual or $94,000 for a family of four and it's a sliding scale subsidy.
APPLEBYSo the subsidies are more generous at the lower end of that income scale and less generous at the top of it.
NNAMDIMaryland and the District of Columbia are both in the process of getting their healthcare exchanges up and running, what's the status there?
APPLEBYThey are moving along. Maryland has 13 insurers who have submitted proposals to sell coverage on the exchange there in Maryland and the District of Columbia has four. They have posted some preliminary information about those premiums on their websites, but those aren't final. They're going through the final process right now so they're working on that. You can go online and see some of that right now. Virginia is going to be part of the federal exchange. We know a little bit less about how many insurers are going to be on the federal exchange.
NNAMDIHow might this delay affect those exchanges?
APPLEBYYou know, I spoke with somebody at the D.C. exchange this morning and they said that it's not going to delay their exchange at all.
NNAMDIOkay. Some are saying this delay will cause more employers to dump employees to end their health coverage since there's an alternative. Is there any indication at all that that is likely to happen?
APPLEBYYou know, like I said, we've seen a few companies threatening to do that but most of the surveys that have come out have shown that employers, at least for the first couple of years, say that they are going to continue offering what they currently offer.
NNAMDIJulie Appleby reports on the health laws. A senior correspondent for Kaiser Health News. That's an editorially independent program of the Henry J. Kaiser Family Foundation. We mentioned earlier that you can go to our website kojoshow.org to see frequently asked questions. Those frequently asked questions that we see -- that are -- that you'll find on our website are done -- created by Kaiser Health News. So, Julie, thank you for everything.
APPLEBYThanks for having me.
NNAMDIWe're going to take a short break. When we come back we'll be looking at Prince George's County. They're looking to make over the area around three metro stops with more condos, shops and restaurants, new downtowns in Prince George's County. I'm Kojo Nnamdi.
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