We’ve asked Maura Carley, President and CEO of Healthcare Navigation, LLC, to help guide us through America’s increasingly complex health-insurance maze. Her first article, “Obamacare’s Here! What’s Your First Move?,” explained the key provisions of Obamacare and laid out the deadlines for choices that must soon be made.
Today’s article discusses how Obamacare will impact those who already have coverage through their employers—as well as the many other workers who are now mandated to get group coverage from their employers. This post also addresses a current worrisome question: “Can my employer refuse to cover my spouse?”—Ed.
The details of Obamacare are puzzling, but can be mastered. Image from Flickr via
• First, here’s how employees (those who now have, or will soon get, group coverage) will be affected by Obamacare.
Businesses with 50 or more full-time-equivalent employees will soon be required to offer their employees health-insurance coverage or pay a penalty. The so-called “Employer Mandate” was originally slated for implementation in 2014. However, the penalties have been pushed back for a year, so that companies not yet offering coverage can delay until 2015.
• What family members must an employer cover?
Companies that currently offer coverage must already include dependent coverage for children to age 26. Businesses with 50 or more employees that are required to offer coverage by 2015 also must offer coverage to dependents to age 26, but they are not required to pay any portion of the premium associated with those dependents.
• What about the employee’s spouse?
Under Obamcacare, there is no requirement that an employer offer spousal coverage. But then, employers have never been required to offer spousal (or any) health-insurance coverage. Medical coverage has always been a perk that companies offer voluntarily, in order to attract employees.
Recently, UPS has decided to stop covering 15,000 spouses of its United States employees who are able to get coverage from their own employers. But this is a decision that has to do with the bottom line, not Obamacare. UPS is not discontinuing spousal coverage to force spouses to obtain individual coverage.
• Question: Some have referred to Obamacare’s lack of a spousal coverage requirement as a “war on at-home moms.” Do you agree?
No. That’s a bit extreme. Remember, in practice, large employers who provide coverage generally offer spousal coverage, and it’s a benefit subsidized by the employer. There is no legal requirement to offer it. It’s a market decision, not a legal requirement. The largest employers typically cover domestic partners as well.
Practices among smaller employers vary widely, and will likely continue to vary widely, because employers of fewer than 50 employees don’t have an obligation to offer coverage at all under Obamacare. Many small employers who do offer coverage don’t currently contribute to spousal coverage or dependent coverage, but make it available at the employee’s expense.
• Question: Do you think employers might begin to eliminate spousal coverage altogether?
No. We don’t know what may happen in the long term, of course, but today’s large employers currently offer family coverage to provide an attractive benefit to recruit and retain good people. For the short term, it’s likely that large employers will continue to provide family coverage—although more companies may, like UPS, discontinue offering it to working spouses who could have coverage through their own employment. Historically, employers have not had an obligation to provide coverage at all, and under Obamacare, employers of fewer than 50 full-time employees will remain exempt.
• What do you expect large employers to do in 2014?
The requirements going into effect in 2014 don’t affect large employers as much as they do individuals and small groups of fewer than 50 employees. We can expect larger employers to continue their recent practices of shifting more of the costs of coverage to employees. Employees are generally paying more of the premium costs than they used to, and deductibles, copayments, and coinsurance have been increased so that employees pay more.
• What do you expect employers with fewer than 50 employees to do in 2014?
Premium calculation methodologies for individual and small groups under 50 will change. In general, premiums for younger adults may increase relative to those of older adults (New York State is an exception. New York will continue with so-called “community rating,” so age will not affect premiums). This will be true for both individuals and small groups (under 50), because the rating methodology will be the same for both.
As a result, you would expect small employers who are currently contributing toward employee coverage to be very mindful of how these changes and others will affect them and their employees.
• What should I be doing?
As discussed in the previous article, if you are uninsured or currently have individual coverage, you should be shopping for new coverage to take effect January 1, 2014. If you don’t have coverage, you will pay a penalty. There is no need to do this before October. You can use a broker or consult a firm like ours, but we charge a fee because we don’t sell any insurance products.
You can also use the state exchanges. The federal web site to go to for information is www.healthcare.gov. On the home page, you can select your state and find additional information. If you are likely to qualify for assistance, you MUST buy insurance through your state exchange to obtain the subsidy (see below).
The following information is from the healthcare.gov website. It shows the income levels at which individuals and families will likely qualify for tax credits to help pay for premiums.
The amount you save on your premium depends on your family size and how much money your family earns. In general, people at the following income levels will qualify to save in 2014. The lower your income, the higher your savings will be. (The amounts below are based on 2013 numbers and are likely to be slightly higher in 2014.)
- Up to $45,960 for individuals
- Up to $62,040 for a family of 2
- Up to $78,120 for a family of 3
- Up to $94,200 for a family of 4
- Up to $110,280 for a family of 5
- Up to $126,360 for a family of 6
- Up to $142,440 for a family of 7
- Up to $158,520 for a family of 8
If you currently have group coverage through an employer or union, you should be carefully reviewing any correspondence you receive about your coverage this fall, making sure you understand any changes or decisions you must make.
• But I’ve seen materials from insurance companies trying to persuade individuals to sign on to new plans in the fall so they can avoid a year of Obamacare changes. What do you think?
It’s still early to know what the rates are yet for 2014 in most areas, so making a change now involves making a decision in a context of uncertainty. If you are shopping for individual insurance, I’d suggest waiting to see what the rates for 2014 will be.