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SMALL BUSINESSES OFFER COVERAGE, WHILE LARGER EMPLOYERS CUT BACK

By: Nicola Heredia, CHS Marketing Coordinator

Obamacare’s Employer Mandate, which was delayed from the original 2014 implementation deadline, will be activated this year. Business owners with 50 or more employees will now be required to provide health insurance to at least 95 percent of their full-time staff.

Health coverage must be provided for employees, who work 30 hours or more, along with their dependents under 26 years of age. If businesses refuse to comply with this regulation, they will be subject to a fine. A penalty totaling $2000 per full-time employee, excluding the first 30 staff members, must be paid by companies refusing to offer health insurance.

"Small businesses should expect the unexpected," says Barry Sloane, president and chief executive of Newtek Business Services Inc. of New York, in a US News article. "Plan as best as you can, because the act is constantly changing."

The mandate does not come as a shock to smaller employees. Some have already enrolled in coverage plans, but those who have failed to comply to the newest aspect of ACA will face steep fines and be subject to compliance audits. The burden to insure employers could greatly affect small businesses’ financially.

“The vast majority of employers in that category already offered health insurance to their workers,” said Larry Levitt, senior vice president at the Henry J. Kaiser Family Foundation, in a San Diego Union-Tribune article. “They may have had to increase offerings in some areas, but most did not have to start from scratch.”

As small businesses learn to manage a new set of standards, larger companies are developing ways to provide coverage, while also cutting back on costs. Although small to medium size companies are required to provide a list of “essential health benefits” to their employees, larger businesses do not have this obligation.

Instead, they have been able to meet federal regulations with regards to the level of coverage they are required to provide, while removing specific, costly categories from the plan. There has been a strong trend toward excluding outpatient surgery from insurance plans.

“I really wonder whether they can do that,” said Timothy Jost, a law professor at Washington and Lee University, in a Kaiser Health News article. “Refusing to cover any outpatient physician surgical services is arguably a violation.”

Jost is not alone in wondering if these types of plans would survive regulatory scrutiny. Although larger companies do not have to provide a list of “essential health benefits”, they still are required to meet a minimum value, which is similar to the high-deductible, “bronze” marketplace plan.

ECBSO, Inc. is a Minnesota-based company that has developed a minimum value plan that covers inpatient hospitalization, but not outpatient. With over 30 businesses enrolling in this type of coverage, there appears to be demand to provide minimal coverage to meet federal regulations imposed on employers.

"We're not trying to provide a program that doesn't have good coverage," Bruce Flunker, EBSO’s president, said in a Kaiser Health News article. "We're trying to provide a program that is meeting the current regulation and is affordable" for employers as well as workers.

Critics of this new trend are concerned that employees are not being made aware of what their insurance plan specifically covers. Instead, there is the risk that individuals who assume this category is covered will face harsh medical bills in the future.

So, while smaller companies are beginning to offer coverage to their employees, it appears that larger businesses are looking at ways to cut back their level of coverage in an effort to save.  The world of health care insurance is ever evolving and Americans need to continue to be highly aware of the changes being made to their coverage plans.

BURDEN OF HEALTH CARE COSTS TAKES A TOLL ON AMERICANS

By: Nicola Heredia, CHS Marketing Coordinator

Although efforts have been made to make the health care insurance business more competitive in order to control costs, Americans that pay to have insurance still face hefty medical costs that many struggle to pay. The cost to have medical insurance is not the only expense to consider, especially when coverage plans feature high deductibles and out-of-pocket costs.

Even with government subsidies available, a study completed at the Urban Institute’s Health Policy Center revealed that Americans are on average spending over 10 percent of their income on health care expenses. With older age or chronic health issues, the study found that people spend up to 25 percent of their income on medical costs. The researchers created a model to estimate costs for individuals and families taking into consideration different income levels with various insurance premium and additional costs.

“There’s been a lot of talk about how high deductibles and out-of-pocket costs are in the Affordable Care Act, and a lot of anecdotes about that, and this study quantifies that in a more systematic way,” said John Holahan, a fellow at the institute in a Kaiser Health News article.

The Health Care Affordability Index report demonstrated that among adults considered to be of low-income status, approximately 53 percent are unable to afford health care, according to a Healthcare Payer News article.  When adults in all income brackets were surveyed, 43 percent reported that their deductibles have created financial stress.

Regardless of the type of insurance or income level, it appears that a large majority of Americans are feeling the burden when it comes to health care costs. The reality is that medical expenses are not decreasing, and if people are unable to pay out-of-pocket costs, a new problem will soon be on the rise.

“We’re at a point where there’s been slow growth in health care costs and huge improvements in the numbers of people who have health insurance,” said Sara Collins, a vice president at the Commonwealth Fund, in a New York Times’ article. “But there is this underlying trend towards higher cost sharing that could put increasing numbers of people at risk for being underinsured.”

Although the Affordable Care Act made insurance accessible to all Americans regardless of income, more studies are proving that it has not made the cost of seeking medical treatment less costly. In fact, the adjustment to the new law has created higher deductible plans and narrower physician networks.

According to a study performed by the Kaiser Family Foundation and the New York Times, approximately 20 percent of the survey's respondents under 65 report being under significant financial stress due to medical expenses. With bills pilling up, many respondents report going through their savings in an effort to keep up with medical bills.

“In fact, people who have problems paying medical bills despite having health insurance are more likely than the uninsured with medical bill problems to say they’ve put off vacations or major household purchases (77 percent versus 64 percent), respectively,” according to the survey.

Cutting back to afford health care costs is a common theme seen throughout the study. However, not everyone has the ability to cut back to afford an unexpected $500 bill. If that is the case, individuals begin to rack up large amounts of medical debt.

The study highlights the struggles that those who are insured continue to face everyday. Although the ACA law appears to have revamped the system and made care accessible to individuals, having insurance does not necessarily mean you are able to afford medical care. Many individuals shy away from treatment in an effort to save money.

Research like the Kaiser Family study show that the U.S. health care system still has a long way to go to truly make medical coverage affordable for all Americans.

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