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Just over a year ago, in
September 2010, the
process of implementing
the Patient Protection
and Affordable Care Act
(PPACA) began. We have
seen changes in coverage
as an array of wellness
benefits have been added
and a number of new
requirements placed on
employers. So, what has
all of this meant to the
employee and the employer,
and where are we going in the future?
There are two provisions in the law
that seem to be working well by allowing
individuals who have either been removed
from the ranks of the insured, or through
no fault of their own, been unable to obtain
coverage.
As a result of the Age 26 feature, there
has been a reduction in the number of
uninsured individuals between the ages of
19 to 26. This has been attributed to that
portion of the law allowing individuals up to
age 26 to be covered by their parent’s health
insurance.
The uninsurable individuals with
pre-existing conditions also have a source
to purchase insurance even though they
have a pre-existing condition. This source
is the Federal High Risk pool. According
to information from the Kaiser Family
Foundation: 52 percent of Americans say
that they or someone else in their household
has what would be considered a “pre-
existing condition.” Among this group, one
in five (21 percent) say they or their family
member has had difficulty at some point
getting health insurance because of a pre-
existing condition, including 14 percent who
say they were denied coverage because of the
condition.
Naturally, the age
26 feature in this law is
increasing the cost of
insurance, and this is to
be expected. However, it
is not the only provision
that is impacting the cost
of insurance. PPACA also
brought an increase in the
number of wellness benefits
included in the group health
plan. And
while the
insurance
contracts are
being revised
to include the new benefits, that task is
ongoing. A copy of the list can be found at
. This also increases the cost of
health insurance.
So, what are employers doing to control
the costs, and what can they expect moving
forward?
Here are a few cost reducing options
currently being utilized:
• Transferring more of the premium to
the employee
• Increasing the deductible and the out of
pocket expenses in their plan
• Adding Health Savings Accounts (HSA)
• Utilizing the Health Reimbursement
Arrangements (HRA)
• Changing the funding vehicle from
fully insured to Minimum Premium,
or Partially Self Funded plans. (Not all
employer groups will qualify for these
types of alternate funding)
Being a little creative can go a long way
toward holding down the cost of insurance.
For example, if an employer increases the
calendar year deductible, and gives the
employees the option to purchase voluntary
Critical Illness insurance, the monthly
premium will most likely go down. The
employees who are concerned with the
increase in deductible can purchase the
Critical Illness coverage to protect them
against some of the increased exposure due
to the higher deductible. This is just one
idea, and there are many options in the
market place for consideration.
Finally, what can we expect in health
insurance costs going forward? The average
increase in 2011 has been slightly more than
9 percent and many have seen increases that
have been greater than 9 percent. Bottom
line, cost will continue to rise.
Should we expect a repeal of PPACA?
Yes, no, maybe, but a complete repeal is
not likely. Will we see portions of the law
eliminated? Absolutely.
The Patient Protection & Affordable Care Act: What it Means for You & Your Business
Raymer Sale, President, E2E Resources
INTRODUCING
THE EXECUTIVE – FALL 2011
PAGE 9