Do You Have a Handle on Health Care Reform?

The annual open enrollment period for Affordable Care Act health coverage has begun. This year marks the third annual ACA open enrollment to date, and Americans seeking coverage through either federal or state exchanges seem to have become reconciled – if not comfortable – with the process. The popular and media perception seems to be that the ACA has stabilized, and while occasional calls for repeal are still heard in Congress, the belief is that “Obamacare” is now a settled law, and a stable program.

This isn’t entirely true. To date, there have been 14 separate modifications to the Affordable Care Act since it was enacted. The most recent of these, the “Protecting Affordable Coverage for Employees (PACE) Act,” was signed into law by President Obama on October 7.

In other words, the law is still changing only a little more than a week before the open enrollment kicks off. Perhaps it’s understandable, given the complexity of the US health care coverage system and the multiple, labyrinthine layers of bureaucracy involved, but that is small comfort to small businesses who are still struggling to meet its complex requirements. Just when benefits administrators think they’ve gotten a handle on what the ACA demands of them, the ground shifts again – upsetting plans, projections, and budgets, in addition to creating outright confusion.

In fact, the PACE Act changes stand to have a direct effect on some 150,000 small to medium-sized businesses nationwide. Originally, businesses with 51 to 100 employees had been slated to enter a small group health insurance market next year; the result was likely to be an 18% increase in the cost of per-employee coverage. The PACE Act modifies this requirement, deferring to individual states to determine the size of businesses required to enter the small group market. While this is likely to mean cost savings for some companies, it will mean additional complexity for others.

Businesses will have to depend upon individual states establishing small group market guidelines – something they may or may not be eager to do given their individual political climates. In addition, companies doing business in more than one state are likely to find themselves subject to differing regulations for employees based in different states. This stands to make negotiations with any unions more complex, not to mention requiring special measures to prevent the perception of unequal benefits for different employees of the same status and type.

As is often the case, the PACE Act “fix” seems likely to generate more problems that will require fixing in future years. It seems unlikely that the ACA is going to achieve absolute stability any time soon; until it does, businesses will just have to learn to enjoy the ride – and be ready to adapt at a moment’s notice.

Have questions about how the PACE Act is likely to affect your business – or need help arranging affordable, ACA-compliant benefits packages for your employees? Trion would be happy to help. Contact us and one of our representatives will be in touch with you as soon as possible.

Major Insurers Leaving Small Groups Stranded

These are difficult times for benefits administrators—especially those working for smaller companies. Costs seem to endlessly rise; the regulatory environment continually changes; and a combination of market forces make it harder and harder to manage what seems to be an increasingly nightmarish health insurance marketplace.

Unfortunately, HR professionals aren’t the only ones finding the environment challenging. Major insurers are too—and it’s too the point where some major national companies are pulling up stakes and abandoning the small group market altogether.

This is a severe blow to smaller companies and their employees. There are fewer coverage choices available; those that remain offer diminished number of options, and plans are becoming more expensive. Employers are left with the unappealing prospect of signing on for higher-cost, lower-value plans, and then having to explain themselves to dissatisfied employees.

At Trion, we’ve been able to help some of these employers out. While remaining with a company’s prior insurer may not be an option, we are able to help companies abandoned by their insurer to find roughly equivalent plans elsewhere while containing costs—and sometimes even reducing them. The key is economy of scale: As a major Professional Employer Organization, Trion is eligible to obtain large-group benefits that are beyond the reach of small and medium-sized enterprises.

Access to a broad range of lower-cost large group plans enables us to offer client companies a range of benefit choices that are usually better than those they’d received from the insurers who had left them behind. Our larger size also gives us increased negotiating strength: We are able to leverage our large-group eligibility to attain more favorable terms and increased plan customization. As a result, clients often find that the disruption created by being “fired” by their insurer of first choice leaves them better off both financially and in terms of employee morale.

We don’t believe that it’s going to be particularly smooth sailing ahead in the insurance marketplace—far from it. Both larger and smaller insurers are caught up in a whirlwind of fast-paced change as the marketplace evolves, as new Affordable Care Act mandates come into force, and as industry consolidation takes place. Whether they like it or not, benefit professionals are going to have their work cut out for them as the ripple effect of these changes makes itself felt in their companies.

In our roles as our clients’ trusted consultant and as a PEO, it’s part of our job to try to make these types of changes ultimately work to the benefit of our clients, however initially disruptive they may be. We’re happy to help any company whose insurer has outgrown them find a solution that works for them, their employees, and their bottom line.