How Employer-Mandated Health Insurance Stacks Up

How Employer-Mandated Health Insurance Stacks Up in Group Health Insurance

All the bills currently in play — the house bill and the two in the Senate — contain employer mandates, but differ to what degree. This has provoked a few layers of questions.

The Senate Finance Committee’s bill penalizes employers who don’t offer their workers any kind of coverage, but stops short of making any requirements whereas the bills from the House and the Senate Health Committee flat-out require employers offer their employees coverage. As a matter of fact, they go one step further: They require employers to contribute a significant share of the cost (except for small businesses) or pay a fine. 

That’s a big difference. And it’s hard to tell which way Majority Leader Harry Reid will lean in his reconciliation of the two Senate bills alone. 

Now, it’s true that for about 60 percent of Americans at big firms, the point is moot since they get their health insurance through their jobs, where they are covered at about 75 percent. But it isn’t for those who work at smaller companies where coverage and employer contribution aren’t as considerable. 

It’s also important to note that anywhere from 2.3 to 2.6 million businesses are expected to opt to pay the penalty rather than offer group health insurance should that version of the mandate go into law.

It will be interesting to see which provision ends up in the final bill, and even more interesting to see how it pans out.

Comments[0]

Golden Gate Restaurant Association To Take San Francisco's Employer Mandate To U.S. Supreme Court, Obama Stays Silent

Golden Gate Restaurant Association To Take San Francisco's Employer Mandate To U.S. Supreme Court, Obama Stays Silent in Group Health Insurance

The Golden Gate Restaurant Association is becoming a litigious force when it comes to overturning a city ordinance which mandates that mid and large-sized businesses pony up money for funding the city-wide universal health care law.

In the suit, the Restaurant Association contends that the mandate violates a law that says only the federal government can regulate employer-sponsored health benefits and group health insurance plans.

The association already lost in the Ninth U.S. Circuit Court of Appeals and is now turning to the U.S. Supreme Court for a ruling, reported the San Francisco Gate.

One thing worth noting, wrote the SF Gate article, was that the Obama Administration was largely silent on the issue. No statements for, against, or even about the case, nothing. President Obama does, however, praise Mayor Gavin Newsom for his work providing health care for everyone in his city.

Whether the nation’s highest court will hear the case won’t be determined until early October of this year.

Comments[0]

National Retail Foundation Opposes Wal-Mart on Health Insurance Mandate

National Retail Foundation Opposes Wal-Mart on Health Insurance Mandate in Group Health Insurance

The U.S. retail industry’s main lobby group vehemently came out against employer-mandated group health insurance, directly opposing Wal-Mart, who supports the proposal.

In a letter to members of the National Retail Federation, chief executive Tracy Mullin wrote, “Come out swinging,” adding that, “To truly lead on the health care debate, it is imperative that businesses, associations and politicians take a stand where it counts and not shy away from deal-breakers like employer mandates,” reported Reuters.

The NRF is the industry’s largest trade group, comprising 1.6 billion businesses. The group represents discount, department, specialty and independent stores along with chain restaurants and other outlets. Wal-Mart is the world’s largest retailer.

Wal-Mart “recognizes others may have a different opinion” on the employer mandate, spokesman Greg Rossiter said. “We know we have taken a pro-business position, and that’s the right thing to do for our company. The present system isn’t sustainable.”

The National Retail Federation wasn’t the only group that expressed opposition to Wal-Mart’s position. The United Food and Commercial Workers Union, which has unsuccessfully tried to organize Wal-Mart workers, sent a letter to the White House raising questions about the company’s position.

Steve Pfister, the NRF’s Senior Vice President for Government Relations, declared, “Employer mandates of any kind amount to a tax on jobs,” adding that, “We cannot afford to have new and existing jobs priced out of our collective reach because of mandated health coverage.”

While many of the details of health reform are for Congress to duke out, the president has voiced his openness to requiring larger companies to provide coverage for employees but exempting smaller businesses.

Comments[0]

Wal-Mart Backs a Mandate on Health Insurance

Wal-Mart Backs a Mandate on Health Insurance in Group Health Insurance

In a letter to the White House and Congress, Wal-Mart’s chief executive Michael T. Duke endorsed “an employer mandate which is fair and broad in its coverage,” reports The New York Times. Wal-Mart, the nation’s largest private employer, has long resisted a group health insurance mandate.

This new stance stunned more than a few folks. Not to mention the letter was cosigned by the Service Employees International Union and liberal think tank Center for American Progress — strange bedfellows for a company with an embattled history with unions and a reputation for being stingy with benefits.

Now that health care reform is becoming certain, companies are starting to jockey for a spot at the negotiating table. Or as Rahm Emanuel said, “Everybody is trying to get their seat on the train,” adding that other CEOs have also expressed support for the idea of requiring employers to provide their workers health insurance.

The tide is undoubtedly turning. A pharmaceutical trade-group representative recently pledged to reduce prescription drug costs by $80 billion over the next decade. Hospitals have a similar cost-cutting agreement in the works.

What is Wal-Mart bargaining for with their endorsement of a health insurance mandate? A guarantee that health care costs will be contained by what’s called a trigger mechanism. They would like to see a system in place that would kick in automatic reductions if certain spending targets aren’t met.

Grab a front row seat, ladies and gentlemen, the next round of negotiations promises to be the most intense yet.

Comments[0]

A New Group Health Insurance Tax Possible On Employer Benefits

A New Group Health Insurance Tax Possible On Employer Benefits in Group Health Insurance

Today’s big health insurance reform news is that President Obama is officially open to new taxes on employer health benefits.

It’s a gigantic leap away from what the president’s message during the 2008 campaign, in which he criticized any thought of a brand new tax on group health insurance and he promised no tax increases for middle-class Americans.

Unfortunately for Middle America, any tax on employer health insurance would hit them square in the nose.

But times have changed. Obama is now president, the 2012 election is still more than 3 years away, voters have short memories, and most of the proposed health insurance reform plans are estimated to cost $1 trillion-plus.

Obama’s senior advisor David Axelrod told ABC’s George Stephanopoulos that the White House won’t be “drawing lines in the sand” about where they’re going to get the money for reform, and taxing employer benefits could be a possibility, wrote the Washington Post.

As McClatchey Newspapers reported, however, President Obama isn’t so keen on the idea. As a compromise, the president is considering taxing only health insurance plans with Cadillac-like coverage, obviously in attempt to aim these potential tax hikes at higher earning Americans.

Politically, such a decision could significantly hurt President Obama’s credibility, but could also be necessary to pay for a massive health reform bill.

On the other hand, the president and his advisors have been shockingly brilliant when it comes to snaking their way out of tough political situations. After the way the president has handled his politics in the past, we wouldn’t be surprised if he could pull this one off.

We shall see.

Comments[0]

Health Insurance Reformers: Don't Forget Small Businesses

Health Insurance Reformers: Don't Forget Small Businesses in Group Health Insurance

When we talk about health insurance reform, for the most part, we’re talking about fixing how the individual health insurance market works. In other words, we’re debating fixes to help Americans who don’t have access to group health insurance through their employer.

The group that often gets left out of the conversation is small businesses — companies with 50 workers or less.

According to a New York Times article, many health insurance companies believe that the small business health insurance market works fairly well.

“Those markets generally work today. They are well regulated by states today,” said WellPoint Chief Strategy Officer, Bradley M. Fluegel.

But small businesses don’t necessarily agree.

Many employers say they face many of the same issues as individuals looking for coverage — in particular, those with pre-existing health conditions typically have trouble finding affordable health insurance.

So far, here are the main options to modify the small business market:

• Leave it unchanged.
• Apply the same reforms to both the individual and small business health insurance market.
• Create a separate reform plan for small businesses.

The Times article didn’t suggest a front-runner and we’re not sure either. As the article writes, “What Congress finally comes up with, of course, is still anyone’s guess.”

Comments[1]

Uninsured Rates in California Went Down in 2007

Uninsured Rates in California Went Down in 2007 in Group Health Insurance

Last year, we were in almost the exact opposite economic situation. The economy was expanding and unemployment rates were relatively low.

In California, the result of a healthy economy was the number residents who had no health insurance in 2007 was slightly lower than in 2005, according to a survey from the UCLA Center for Health Policy Research.

In 2005 the uninsured rate was 20.2 percent. In 2007, it was 19.5 percent, reported the Sacramento Bee. Not really a significant drop, but an improvement nonetheless.

Why the drop of uninsured? The number of people covered with a group health insurance plan went up.

It’s certainly odd to hear about a healthy economy these days, even if it was only for last year.

But not surprisingly, the survey’s authors predicted the uninsured rate likely increased due to the downturn of the economy and higher rates of unemployment.

Here’s a key insight by the lead author of survey, E. Richard Brown:

“We’re looking at the final year of an economic expansion (2007), and yet the gains in coverage were small. If the employer-based system can’t increase health insurance in good times, how will they do it in bad?”

Comments[1]

Average Health Insurance Deductible For Group PPOs Now $1,000

Average Health Insurance Deductible For Group PPOs Now $1,000 in Group Health Insurance

Yesterday, HR consulting and investment firm Mercer, released a report that found the average deductible for an employer-sponsored PPO health insurance plan is $1,000 for 2008.

Last year, the average PPO deductible was half that at $500. In fact, according to the Mercer report, the $500 average held from 2001 to 2007. In 2000, the average was $250.

So why are group health insurance deductibles increasing?

There were a few key points to this increase, says the report. The first was that health care cost for employers went up by 6 percent for the last four years. That’s led to a near-nationwide trend of cost shifting to employees through higher deductibles and higher premiums.

Another was the increasing popularity of high-deductible consumer-directed health plans and Health Savings Accounts (HSAs). Such plans are now offered by 20 percent of large businesses.

Really, though, this is another way of cost shifting to employees. Higher deductibles and HSAs mean workers pay for more of their own health care costs out-of-pocket.

That’s not to say there aren’t advantages to consumer-directed plans and HSAs. You can save money tax-free in an HSA, and you still have major medical coverage in case of emergency.

But these plans are generally best for those who don’t often need care.

The bottom line, though, is that as deductibles go up, wallets get thinner.

Comments[0]

U.S. Businesses Nervous of Obama's Health Insurance Reform Plan

U.S. Businesses Nervous of Obama's Health Insurance Reform Plan in Group Health Insurance

One of the themes from Republican presidential candidate John McCain is that Democratic candidate Barack Obama will hurt businesses by adding an employer mandate on health insurance coverage.

It’s true that Senator Obama wants to “mandate” employer coverage by giving businesses the choice of providing health benefits or paying their workers to buy their own plans.

But Senator Obama hasn’t yet made clear how much businesses will have to pay if they don’t provide health insurance.

Experts can’t really agree on how much the amount might be, but best guesses put the number between 3 and 7 percent of a businesses’ payroll.

Even 3 percent scares most employers.

“If they do that, prices go up and employment goes down because nobody can absorb that, ” one business owner in Massachusetts, if the amount nears 6 percent.

Economists estimate that some 224,000 workers in the U.S. will be hit with lower wages or be laid off under this plan, according to The New York Times.

In stark contrast to the Obama plan, Senator McCain would make it attractive for businesses to drop health benefits altogether. Under McCain’s plan, group health insurance would no longer be tax-exempt — which means employer-sponsored coverage would be taxed for the first time in U.S. history.

But McCain will give individuals $5,000 in tax credits to help people buy their own coverage in the private market.

Mandate versus no health benefits costs.

We’re going to go out on a limb and say employers might be a bit more aligned with Senator McCain on the health insurance issue…

Comments[0]

Michigan Group Health Insurance Premiums Increase At Highest Rate In The Nation

Michigan Group Health Insurance Premiums Increase At Highest Rate In The Nation in Group Health Insurance

It’s as if Michigan workers didn’t have enough to worry about…

Residents of Michigan have been battling a sluggish state economy for a few years now. Auto workers are trying to dodge layoffs and forced early retirements, and young college graduates are struggling to find their first jobs.

Now, a new report from Families USA, a health care research group, found that group health insurance rates were increasing more than wages at the fastest rate in the nation.

Health insurance rates for employer-sponsored plans went up by 78.2 percent from 2000 to 2007, yet wages only increased by 4.6 percent in the same period.

Workers in Michigan are also now paying proportionately more than their employers, wrote an article in the Detroit Free Press.

From 2000 to 2007, the amount employers paid for health insurance went up by 63.3 percent.  But in the same time period, the amount workers paid for coverage increased by a whopping 170.6 percent, according to the Free Press article.

“[T]he whole system is being stretched. [This report is] another cause to look at the impending collapse of the whole health care system,” said State Representative John Dingell.

So what kind of health insurance reform will residents of Michigan choose?

It seems as if they have already made their decision.

Early on, Michigan was considered a battleground state in this election. But Republican Senator John McCain announced yesterday he is pulling his campaign from the state, after a trend of decreasing numbers in the polls over the past couple weeks.

That all but cedes the Wolverine State to Democratic Senator Barack Obama.

Comments[0]

Federal Health Insurance Benefits To Go Up By 8 Percent

Federal Health Insurance Benefits To Go Up By 8 Percent in Group Health Insurance

According to the U.S. Office of Personnel Management, group health insurance premiums for the Federal Employees Health Benefits Program will go up by an average of 8 percent for 2009, reported the Washington Post.

For some federal employees, premiums will go up by as much as 13 percent, wrote the Post article.

Why such big premium increases?

Nancy Kichak, the associate director for strategic human resources policy in the Office of Personnel Management, pointed blame to technology and medical inflation. Others blamed a slow movement to generic drugs by policyholders.

Either way, it wasn’t good news for federal employees.

“These premium increases keep eating into the wallets of federal employees. Something has to be done to keep these increases in check,” said president of the National Federation of Federal Employees, Richard N. Brown.

This could be bad news for Democratic presidential candidate Barack Obama’s health insurance plan. Senator Obama would open up the federal health plan to all Americans.

Comments[0]

Why Employer Health Insurance Cost Reductions Are A Bad Thing

Why Employer Health Insurance Cost Reductions Are A Bad Thing in Group Health Insurance

Employers might be rejoicing that their health insurance costs will increase at a slower rate next year, but it’s not necessarily a good thing.

Why? Unfortunately, the employer’s savings is going to be at the employees’ expense.

First, here are the facts:

A recent survey from by consulting firm, Mercer, found health insurance costs for employers will increase by 5.7 percent in 2009. That’s a slower increase since 2005, when employers’ health insurance costs have gone up by around 6 percent every year, reported The New York Times.

So how are employers lowering costs for themselves? By shifting the burden on their workers, wrote the NY Times article.

Mainly, they will do this by offering less comprehensive plans.

So if you have a group health insurance plan with an employer, next year there’s a good chance you might be on the hook for higher premiums, higher copays, higher coinsurance, and/or higher deductibles.

Well, here’s to employer health insurance costs increasing faster in 2010!

Comments[0]

Health Insurance and The Economy

Health Insurance and The Economy in Group Health Insurance

In 2007, more Americans had health insurance than 2006. But what’s the outlook for 2008?

Not good, says a report from the Employee Benefit Research Institute (EBRI).

The non-profit research organization just released the report today that shows that the number of people covered with an employer-sponsored health insurance plan will most likely drop this year.

The number of Americans with an employer’s coverage has decreased since 2000, but that was matched with an increase in the number of people who found coverage in the individual health insurance market.

With a stronger economy, people could afford their own plans, reported the Kansas City Star.

“The increase came hand-in-hand with a strong economy and low unemployment rates which caused more employers to provide health benefits in order to attract and retain workers, and also may have resulted in more workers being able to afford health insurance,” said the EBRI report.

Today, that’s not so much the case.

These days with the economy on the downswing, unemployment rate is way up and fewer people will be able to afford coverage on their own.

That combined with the fact that gas prices and food prices are the highest they’ve ever been, and people are struggling to keep their mortgages, it’s no shock that paying for health insurance is the first to be cut from a family’s budget.

Comments[0]

Small Business, Group Health Insurance, and The Candidates

Small Business, Group Health Insurance, and The Candidates in Group Health Insurance

More on the Presidential Health Care Campaign 2008:

When it comes to rising health insurance and health care costs, there’s one group that’s hit especially hard: small businesses.

These days, if a small business can afford group health insurance for its employees, it’s just short of a miracle.

So when a small business owner goes to the voting booth on November 4, who will he or she choose?

Well, here’s where your candidates stand on small business health insurance (so far).

Arizona Senator John McCain, soon-to-be the official Republican nominee, wants to actually move away from the employer-based system — offering tax credits to individuals to purchase their own individual health insurance plan.

Senator McCain’s idea of helping small businesses is giving employees more options, such as purchase a health plan across state lines.

Illinois Senator Barack Obama, the Democratic nominee, would rather require all employers kick in something for health insurance for workers. Senator Obama wants all companies to either offer their employees coverage or help pay for their workers’ individual health insurance plans.

Under Obama’s plan, small businesses would be exempt.

Unfortunately for Senator Obama, that’s not convincing small business owners — the Democratic presidential nominee hasn’t yet said who qualifies as a small business.

“We’d like to see more specificity on almost everything. A lack of specificity breeds worries,” said a lobbyist for independent businesses.

According to the Wall Street Journal, Obama economic policy director, Jason Furman, said, “We would work with the Treasury to design the appropriate threshold for defining a small business.”

But Senator Obama does have some health insurance specifics for small businesses — he would offer small business employers 50 percent tax refund if they provide their workers health coverage.

“I’m announcing my plan to provide real relief for small business owners crushed by rising costs, an idea championed by my friend Hillary Clinton, who’s been leading the way in our battle to insure every American,” said Senator Obama.

The Wall Street Journal article said McCain has the edge with small business health insurance, but we’re not too sure…

Comments[0]

Rhode Island Governor Can’t Raise Health Insurance Premiums For State Union Employees

Rhode Island Governor Can’t Raise Health Insurance Premiums For State Union Employees in Group Health Insurance

Rhode Island Governor Don Carcieri set a goal to balance the state’s budget, taking aim at a state employee health insurance plan.

Governor Carcieri threatened to lay off hundreds of workers if union members with family health plans didn’t agree to pay more for their insurance premiums and forgo a pay raise.

Union leaders made a preliminary agreement with the governor — affecting some 4,000 members of Council 94, Rhode Island’s largest employees union.

But Council 94 members strongly voted against the proposal, reported the Boston Globe.

Governor Carcieri then tried to implement an executive order that would have forced the proposal, but that order was denied by Superior Court Judge Patricia Hurst.

Now, Carcieri will seek an immediate stay from the state Supreme Court and threatened state employee layoffs if he didn’t win, wrote the Globe article.

Should the family health insurance of Rhode Island’s state employees be a target for budget cuts?

Comments[1]