Small Business Medical Insurance – Six Health Care Reform Questions, and Answers

Health care reform is back in the headlines as a recent court struck it down as unconstitutional and Congress continues to debate its future. Regardless of the outcome, medical insurance for small business is certainly going to be impacted, one way or another, in the coming months and years. Below are six important questions about health reform as it relates to small employers.

Question #1:

What is required of small employers with less than 10 who do not offer health insurance?

A: There are no specific requirements of employers with less than 10 employees – they are not required to offer coverage. Employers with greater than 50 employees are subject to penalties if they do not offer coverage, $2,000 per full-time employee over 30 employees.

Question #2:

What about illegal immigrants? The government wouldn’t be able to regulate their coverage so they would still be uninsured, right? Would hospitals still have to treat them?

A: Correct. Health Care Reform does not apply to illegal immigrants. Yes, hospitals would still be required to treat and the cost of uninsured would be passed to those that are insured through higher charges by hospitals. This is exactly what is happening today.

Question #3:

Is Health Care Reform counting employees as Full Time Employee status, or by total head count? Many smaller employers are aming the system to classify staff as part-time employees and paying overtime versus providing health benefits.

A: The calculation to determine full time “equivalent” employees will be based on total hours worked by “all employees” divided by 30 hours. Part time employees are included in the calculation.

Question #4:

What is the benefit of a health plan being grandfathered in versus those that are not?

A: Grandfathered plan do not have to provide 100% preventive coverage, treat emergency care the same in and out of network, comply with new internal and external appeal requirements and apply broader definition of “primary care physicians”

Question #5:

The Cadillac Tax proposal seems to ignore traditional practice of charging higher premiums on older employees. What may look like a Cadillac plan for a 30 year old is likely a very ordinary plan for a 56 year employee.

A: Correct. Health Reform includes a requirement that health insurance premiums can not vary by more than a 3:1 ratio for age. Still many health plan premium for larger groups is based on claim experience and older workers have higher utilization that will be reflected in their premiums. It is expected that these inequities will be worked out before the tax goes into effect in 2018.

Question #6:

With insurance companies, like Blue Shield, asking for a 59% increase, how do the employees see a benefit before the main provisions kick in by 2014?

A: There is very little in the Health Reform law that addresses costs. It is expected that health care costs will continue to increase at 12% to 15% annual health care inflation. Health Care Reform requires insurers to submit premium increases to state department of insurance for review and must meet new health care ratios, i.e. 80 % to 85% of premium must be spent on health care.

As more and more details of health care reform are clarified, the administration and details relating to medical insurance for small business is likely to become less cloudy and more defined. Continue to watch the news as the story unfolds.

Is Health Care an Unalienable Right?

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men……”

Masterful words written over two centuries ago by Thomas Jefferson and the opening lines of the second paragraph of the Declaration of Independence. Today in the United States there is heated discussion about U.S. citizens having a “right’ to health care and universal health insurance. People who are against universal health point out that the Declaration of Independence does not mention health care as an unalienable right while supporters point out that the phrase states that among our unalienable rights are life, liberty, and the pursuit of happiness as only three examples.

The declaration states that in order to secure these rights governments are formed and these governments then write laws to protect our rights. We have the right to life and laws are written regarding those people that might try to end our lives. We have the right to liberty and laws are written to protect us against those that may enslave us. We have the right to the pursuit of happiness and there are laws written to protect us in the workplace or for sports, such as Title IX.

So do we really want to look at healthcare as a right and have laws enacted to enforce health care or look at health care as an individual choice?

Today, one out of three Americans are overweight. Diseases such as diabetes, heart attacks, strokes, low back pain, are all on the rise and all have a direct link to obesity. Yet, except in certain exceptional medical issues, obesity is a choice. All you have to do is look at what the average overweight American is buying for food choices. We drink soft drinks in greater volume than water and milk; we eat chips and fries more often than a baked potato; our consumption of fruits and vegetables pales when compared to cookies, cakes, and other snacks.

The prevalence of scooter carts at stores has exploded so that rather than walking and getting some semblance of exercise, we sit and ride while purchasing our sweetened and fried goodies. Look at many of the people riding those carts and you will come to the realization that many are not physically handicapped from walking but just to darn lazy and fat. Perhaps fat is not politically correct. Substitute thin challenged if you are offended.

So if health care is a universal right how shall or should we enforce laws to assure our right? If one-third of the population is making poor choices and have their health affected by their personal decisions why should I have to pay for their insurance or medical bills? If they develop a chronic disease as a result of poor choices why should I foot the bill? Do we make laws that state that if you are overweight that you cannot receive health care unless you show a decrease in your weight? Do we form “food police” to enforce laws that restrict consumption of snacks under penalty of loss of health care?

So we have some decisions to be made. Do we make health care an unalienable right pursuant to laws instituted to enforce the restriction of voluntary decisions no matter how unhealthy that they may be or do we keep it as a choice of free will for which individual citizens are ultimately responsible? You decide and then consider how to fix health care.