From MIKE KING
UPS, Delta, now Home Depot. There’s a lot going on in the employer-based insurance market. And because the changes these companies are enacting come at the same time Obamacare is rolling out, it’s easy to connect them to the new law.
But, as these stories unfold, it’s important to keep a few things in mind before jumping to conclusions:
* This is the time of year all large companies, including those that are self-insured, make changes in their employee benefit plans. Changes like dropping spouses from the employee plan if the spouse qualifies for a plan because he/she works for another company that offers group health benefits have been accelerating in recent years. There’s nothing new about this change, but with health insurance about to become much more widely available it may make sense for some companies to do this.
* Go back over the last 10-12 years and think about how often during open enrollment employees were shocked to read about higher premium costs, higher deductibles and higher co-pays, just to keep the plans they had. Then consider that for many workers those costs continued to rise year after year while wages stayed stagnant, and in many cases (because of furloughs and other cost-cutting measures), were cut. It was during those years that momentum began to build for major reforms in the system.
* Keep in mind that the employer-based insurance market has fluctuated widely in the plans available to part-timers. They go from bare-bones plans that don’t cover much and don’t cost much (for employees, as well as their employers) to more traditional plans that can come with a hefty price tag for both. Again, with the insurance exchanges about to open up, it only makes business sense for companies to think about whether they want to continue to offer a plan to their part-timers that may not be as good, or even as affordable, as one the employee will be able to buy on the exchange.
*Speaking of part-timers, it’s important to remember that if the job at Home Depot, or Wal-Mart, or anywhere else that hires a huge volume of part-timers is the only job the employee has — for whatever reason he or she can’t find full-time work — then these employees will more than likely qualify for a subsidy to help pay for their insurance. And because these plans must meet basic minimum benefit standards — paying for preventive care, prescription drugs, etc. — the employees could be much better off buying on the market than having to re-enroll in the plan they now get on the job. Unfortunately, because some states have decided they would rather try to obstruct the new law by any legal means necessary, Home Depot workers in California will more than likely find a more affordable plan on their state exchange than Home Depot workers in Georgia. That’s why it was important for states to create their own exchanges, so they could negotiate with insurers on behalf of consumers for a more competitive marketplace. Georgia didn’t do that. State officials couldn’t muster up even that little amount of political courage to help the state’s residents get a better deal. So Georgia consumers will have to take the prices Ralph Hudgens and his friends in the insurance industry stick them with. Still, it’s better than nothing…but, wait, I digress, that’s another post on another day.
* From the perspective of recent history anyway, it’s also important to remember that many of these large, part-time-employee-based companies were pretty damn late to the notion that while they were fat and happy they ought to be providing decent benefits to this huge volume of workers. They may have been good about providing those benefits to supervisors and full-timers, but it wasn’t that long ago that workers advocates and others shamed these companies into providing at least something to part-timers. In other words, if it took them years to start offering their employees a health plan, it shouldn’t surprise us when they choose the first opportunity they can to get out of it. Only this time, with the new law in place, their employees won’t be left out in the cold. In fact they could be better off.
So read these and future stories about employer changes in health care plans carefully. No doubt, with the market about to change so dramatically, some of the decisions being made by companies are being implemented because of the new law. But more than likely they are the result of accountants showing executives how the bottom line can be improved by diminishing — if not eliminating altogether — the continuing cost of insuring some of their employees. Come to think of it, when hasn’t it always been that way?