Annette Festa, President
Progressive Benefits Solutions
Having reached the one-year anniversary of the introduction of Obamacare, we sat down with Annette Festa, president of Progressive Benefits Solutions, to discuss how businesses are responding to the new health care reform and what challenges can be expected as we step into its second year.
Major changes: Employers are experiencing exorbitant increases in premiums averaging from 40 to 80 percent, due to the new rating methodology and the three new taxes to help sustain the health insurance exchanges. Employers have to be creative and compliant in developing their employee’s cost sharing contributions so the premiums are affordable and not damaging to the policyholder’s business.
Benefits in participating: Women’s wellness at “0” co-pay; employer tax credit; medical loss ratio rebate; no pre-existing conditions for children up to age 19; and now no pre-existing conditions for anyone.
Downfalls to participating: The new rating methodology has caused the rates to spike; the burden of new taxes imposed on small employer premiums; and the new streamlined doctor and hospital networks.
Future challenges: Employers should be open-minded to offering base and buy-up health plans to cost share their premiums in a defined contribution platform style of plans. Alternate funding health plans are viable options for employers with partially funding the claims. Since the employees’ maximum out of pocket liability has increased, employers should offer worksite benefits to minimize the higher out of pocket or gaps in coverage.
Overall business affect: The larger and smaller businesses are being affected in different ways. The smaller businesses have experienced the large rate increases due to the new rating methodology in their health care premiums, but are not subject to the pay or play penalty. Pediatric dental is required in the small employer coverage while the large group is not required to carry this coverage in their insurance program. The larger groups (100-plus) will have to offer coverage to be compliant as of Jan. 1, 2015 or will have to pay the penalty. The 50-plus groups will have to offer coverage to be compliant in 2016 but will be calculating their employees and reporting them to the IRS starting Jan. 1, 2015.
Response to Obamacare: My clients are investigating fully insured and partially self-insured plans, as well as non-conventional association health plans.
For more from Festa, visit SouthJerseyBiz.net.
Published (and copyrighted) in South Jersey Biz, Volume 4, Issue 11 (November, 2014).
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