The #1 misconception among my small group clients is that they are required to offer health insurance to their employees or they will be penalized. That is not true. Only groups with 50 or more full time equivalent employees are required to offer coverage or be penalized. If you have a lot of part timers or seasonal employees they could factor into the employee count, so call me and I can help you do the calculations.
That said, the reason you bought a group health plan in the first place- to attract and keep quality employees- is still a very real issue. So what do small groups need to consider in navigating the 2014 changes?
1. You don't have to change plans until your renewal in 2014. So your current plan will not necessarily change 1-1-2014
2. Your plan will have to meet the minimum benefit requirements. We will have more information on plan specifics as the summer comes, so stay tuned. Expect really high deductibles and out of pocket maximums to come down.
3. You will still have to pay a portion of the employee premium, but the large group "affordability clause" will not apply to you.
4. As I meet with you personally on your renewals, we can discuss if the SHOP Exchange is an good option for you, and if you qualify for a tax credit.
Things keep changing, so watch this space for updates as they come along, and please contact me with any questions.
Joe Hart – Parisi Insurance Agency – (800) 358-5868
There’s a lot of discussion in the media about how employers
will react to PPACA in regards to providing employee coverage. Many predict
that employers will stop providing employee coverage entirely, since most
employees will be able to find affordable coverage through an exchange.
If most employers choose to drop their group health plan, their employees will flood into the individual insurance market. They will have to become more educated about their health coverage. This means developing a true understanding of a plan’s benefits before purchasing it, and becoming more proactive in personal health.
Seeking help from an agent or broker will only release some of the additional responsibility individuals will face in purchasing their own plan. Individuals will have to be engaged, amenable, and forthcoming in a process they may have no familiarity with. However, consulting an agent or broker will likely prevent them from choosing the wrong plan, thereby avoiding a medical and financial disaster down the road.
The PPACA (also commonly referred to as “Obamacare”) goes into full effect next January. At that time, many people who previously could not afford insurance, and/or had pre-existing conditions, will be able to get health insurance. While these individuals are happy to wait for the changes to go into effect, many others whom the Act was not specifically designed to help continue to go without insurance. Surely, the recognition that health insurance is important, and should therefore be accessible to everyone, is the main reason the Act passed. If it is so important, why do so many eligible individuals choose not to buy it?
The answer lies in how individuals evaluate their benefits and risks. For those individuals without pre-existing conditions, a common excuse we hear for not buying health insurance is “I don’t need it, I’m perfectly healthy.” These individuals often operate under the misconception that health insurance is for sick people. Health insurance is not for sick people, it is there for when healthy people BECOME sick. Another misconception is that if you are healthy now, you will stay healthy. However, no one plans on getting sick, and being healthy today does not guarantee you’ll be healthy tomorrow. When speaking to prospective clients, we like to use the example of cancer, because it is common, and its treatment is both costly and complex. Young individuals often rebut this example with the argument that they are too young to worry about cancer. While it is true that cancer rates are greater among older individuals, this does not mean that cancer had made a contract with your body not to bug you until after your 40th birthday. Cancer does not care how old you are, how often you go to the gym, or how many vegetables you eat. For example, a young Sacramento woman recently put on a fundraiser to raise money for her medical bills. She had developed bone cancer in her back, and needed to have life-saving surgery and treatment. She was only 28 years old, and in great shape. While she was able to raise some money, it did not even come close to the total cost of her treatment.
Another common excuse we hear from individuals who choose not to buy health insurance is “it’s too expensive.” It’s not that these individuals cannot afford to buy health insurance, but rather they do not see it as a justifiable expense. Again, this is because of how they evaluate their risks and benefits. Usually, they are the same individuals who believe they will never get sick, so they see no tangible benefit in purchasing health insurance. So they choose to hold onto the money they would otherwise spend on premiums. What they don’t understand, is how expensive it can be to NOT buy health insurance. Let’s say they are right, they don’t buy health insurance, and go an entire year without getting sick. So they go and spend what would have been a year’s worth of premiums on a deluxe ski trip in Tahoe. On a particularly difficult run, they fall and hit their head, resulting in serious head trauma. They need to be airlifted out to the nearest Trauma-1 hospital, so life-saving brain surgery can be performed. They have surgery, are hospitalized for several weeks, and require additional medication and treatment after they are discharged. Once home, they open their mail, and see their medical bills. How much do you think all this treatment cost? The price of an air ambulance alone is $25,000. So unless this person has an extra $25,000 lying around, they are looking at a future of long-term bad debt from their transportation costs alone. So what’s really more expensive – buying health insurance, or not buying it?
The truth is, each day you go without health insurance is another day you put yourself at serious risk. Medical risk: because you might not be able to access life-saving treatment and/or prescription medication. Financial risk: because you would have to pay these costs out of your own pocket, putting you in serious debt for a long, long time. And while you may think an illness or an accident could never happen to you, remember that no one is invincible or unbreakable. So don’t wait to protect yourself, get health insurance, and secure a happy and healthy future for yourself.