HELENA — As health plans go in Montana, the Montana Contractors’ Association plan for employees at its member firms is a good one — great benefits, very little cost to employees, locally managed.
But the Affordable Care Act, the law known as “Obamacare,” has a bitter pill for the nonprofit plan to swallow this year, its administrator said Monday: Increased overhead that may exceed $1 million.
“When we look at the Affordable Care Act, it’s hard for us to consider it as progress,” said Gene Schadt, director of trust operations for the MCA. “Successful association plans are going to be buried with costs that have nothing to do with their own membership, and no benefit to their own membership.”
Schadt spoke Monday at a meeting of businesspeople in Helena, organized by the Montana Chamber of Commerce to bring business concerns about the law to U.S. Rep. Steve Daines, R-Mont.
Daines, a critic of the law who’s also running for the U.S. Senate this year, said his office has been “bombarded” with complaints from citizens and business owners about its sometimes hidden costs and hassles.
“I think we’re seeing there is not much affordable about the Affordable Care Act,” he said.
Business owners and representatives Monday told tales of having unexpectedly higher health insurance costs, related to new rules that said they must abandon old policies and find new ones that complied with the law.
But Schadt’s talk focused on something else: New fees and taxes imposed on the contractors’ self-insured, nonprofit health plan.
The 25-year-old plan covers 3,000 employees of the construction firms participating in the plan, as well as nearly 4,000 of the workers’ family members.
Employees pay no premiums for the coverage, which includes medical, dental and vision. They have a $550 per person or $1,150 per family annual deductible on the coverage and pay 20 percent of any health costs after they pay the deductible.
But starting this year, the plan — like all insurers or insurance plans — must pay a $63 per person fee to finance a national “reinsurance pool” to protect insurers selling subsidized policies to individuals. That’s a $440,000 cost for the contractors’ plan.
Also, in November, the Internal Revenue Service issued rules on a new nationwide tax on health insurers, starting in 2014.
Schadt said the MCA thought its self-insured plan would be exempt from the tax, which exempts some self-insured plans. But the rule said the tax covers multi-employer plans, and the amount could be as much as $750,000 this year for the contractors’ plan, he said.
The new fee and tax may add $1.2 million to the plan’s administrative costs, or nearly double its current $1.5 million budget, Schadt said.
In an interview after Monday’s meeting, Schadt said most of the money raised by these fees serves a benevolent purpose: They pay for parts of the ACA that make health coverage available and affordable for others, through expansion of Medicaid or the new health insurance exchanges.
Health care redo
Yet he said the fees should be called what they are: Subsidies for the government’s “favorite sons” in the health care redo: Medicaid and the private insurers selling policies on the exchanges.
Schadt also noted that another federal law regulating plans such as the MCA’s requires them to use their assets for the “exclusive benefit” of their members.
“We find it ironic that, in order to comply with this new law, we must violate the primary objective of another law that’s been with us (for decades),” he said.