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RANDY: In its current form the Affordable Care Act draws a line between businesses with less than 50, and more than 50, full-time employees. Those with fewer than 50 fulltime workers are not obligated to offer healthcare packages, while those with more than 50 must, under the law, provide affordable health coverage. To hear how one very large local employer has been dealing with the ACA, I talked to Andy Hedgepath, Benefits Manager for Cox Health Systems.
ANDY HEDGEPATH: Cox Health has increased the size of our workforce to over 10,000 employees now.
RANDY: 7000 of those employees work at least 30 hours a week and are eligible for enrollment in Cox’s health insurance plan for themselves and their dependents. Of that 7000, 6300 are enrolled. Hedgepath says Cox has historically offered what he calls a “comprehensive benefits package,” long before the Affordable Care Act went into law in 2010. One thing the ACA has done is add some components to the plan Cox already had in place...
ANDY: ...such as extending the child’s ability to remain on your plan until the age of 26—we were doing the age of 23 before. We no longer have lifetime “caps” on our plan, meaning once you exceed a certain threshold of coverage—you know, in the old days you were out... no more plan. The Affordable Care Act has changed that, and, I think, for the better. That’s important, you want to make sure you take care of people. We are a self-funded plan, so we hold the ability to set our rates, set our plan design, and administer the plan as we see fit.
RANDY: Andy Hedgepath says Cox has also added more in the way of preventive health benefits in order to be in compliance with the Preventive Services Task Force guidelines.
ANDY: A major focus of the ACA, obviously, is prevention, trying to find things early so that you can get under a doctor’s care. For example, in a Stage 4 terminal cancer, if we can catch it earlier then we’re saving lives, and that’s important.
RANDY: But are the changes imposed by the ACA improvements, or are they a source of real and potential difficulties?
ANDY: The Affordable Care Act is now the law of the land—for the good and the bad, it is what we have. And at Cox Health we’ve chosen to embrace that. Certainly it has some shortcomings. the challenge that we see is this constant pushing back or delaying of implementation. I can tell you that we rewrote our open-enrollment materials at least six times because of delays and adjustments that kept coming out. So that’s probably the most frustrating thing.
RANDY: And has that stabilized now?
ANDY: It seems to have stabilized. We still expect some further guidance from (the) Treasury (Department) throughout the 2014 year. But we’ve really largely weathered the storm to this point, and I think it will get better. But certainly it’s not been without its challenges, to try to figure out what we’re supposed to do to comply. You have to sift through the static. And I think what we will tend to find on the other side is, we’re going to be better off in the long run. Certainly it’s not without its shortcomings—we can talk about “re-insurance fees.” One of the possibly more unpleasant features of the Act is that we have these fees that are being assessed to us now.
RANDY: One of those fees helps fund the “Patient-Centered Outcomes Research Institute,” which Hedgepath describes as a think-tank focusing on prevention. Every health plan, whether self-funded or fully insured, was assessed this fee starting in 2012.
ANDY: That fee amounted to $1.00 per covered life per year, okay? So that’s not a whole lot—no big deal. That increased to $2.00 for 2013... still pretty reasonable.
RANDY: Then there’s the “re-insurance” fee, which is designed to help cushion any overages in spending and health costs.
ANDY: Beginning in 2014 we have this looming “Re-Insurance” fee--$5.25 per covered life per month! that’s sixty-three dollars and some change per year, per individual covered. The issue is, the government doesn’t have a lot of money to throw around right now—so we as citizens are helping prop up this healthcare.gov infrastructure to create this reserve account. This re-insurance fee was designed to help float and get www.healthcare.gov established. The problem is, if you look at that fee for Cox Health, we have 13,000 insured lives—that includes our employees and their dependents. that amounts to over $800,000 a year in additional fees on top of premiums. So we had to budget that in this year, and that’s really, really tough. That’s a big hit to our staff.
RANDY: The Re-Insurance fee is set to be phased out at the end of the 2016 calendar year, and the Patient-Centered Outcome Institute fee will run out after 2018.
Andy Hedgepath says Cox has encouraged employees to log onto healthcare.gov and take a look around the Marketplace—as they say, “knowledge is power.” But Cox employees are unlikely to jump ship to another plan.
ANDY: If your employer provides you coverage and it meets essentials standards, and if it’s deemed “affordable,” then you don’t qualify for any tax subsidy or reduced rate on the Exchange. So I don’t anticipate our employees will be able to find coverage that would cost them the equivalent of $40.00 per pay period, which is what our full-time rate will be for the 2014 calendar year.