HELENA — In the face of new health insurance requirements under the Affordable Care Act, most Montana businesses that already provide health coverage for employees are staying with it, business health advisers say.
Yet business owners also are facing increasing costs and complexity when it comes to employee health plans, prompting them to wonder what the future holds.
“Although it’s called the Affordable Care Act, we’re not seeing a lot of changes that are making it more affordable,” said Kevin Larson, president of EBMS, a Billings firm that manages self-funded health plans for companies in nine states, including Montana. “A lot of these (changes) will add costs.”
Still, Larson said most larger businesses with employee health plans consider them to be a good recruiting tool and investment in their workforce, and are taking a “wait-and-see” attitude on whether to pass ACA-related costs directly to employees.
“We have not seen our employers turn and run,” he said. “They’re watching what’s going on, but they’re also investing in their (health plans).”
The ACA, also known as “Obamacare,” creates many new requirements and costs affecting employee health plans.
Next year, businesses with health plans must pay a $63 per-covered-person fee, to finance a reinsurance pool for individuals buying their own plans via the new state online “marketplace.” Some other, lesser taxes and excise fees on health plans also are taking effect.
Health plans also no longer can restrict entry for people who have pre-existing health conditions or have annual benefit limits, adding costs to the plans.
The ACA also requires businesses with 50 or more employees to provide health coverage to employees, or pay a tax penalty.
The Obama administration has delayed enforcement of this requirement until 2015, but some businesses already are reacting to it.
Becky Byrne, a benefits consultant for PayneWest Insurance in Missoula, said she has a client with 80 employees that plans to drop its employee health plan, pay the penalty and then give leftover money it would have spent on its current plan to employees, to help them buy individual policies on the online marketplace.
“The ACA is really putting employers in a tough spot,” she said. “Affordability for Montana employers is really getting out of reach. … Everything that the ACA has done comes at a cost.”
Byrne says while most employers are keeping existing health plans for workers, some are dropping employee coverage because it’s become too costly and complicated.
“(Some) employers are just tired of dealing with health insurance,” she said. “They want out of the business.”
Smaller businesses are not required to offer health coverage to workers, but that doesn’t mean they’re unaffected by the law.
Some of these businesses had expected they might be able to shop for polices via the online marketplace. That aspect of the marketplace has been delayed for a year.
Others, including some that offer coverage now, had been hoping they might be able to direct their employees to the marketplace to get a better deal with a federally subsidized individual policy.
But early technical problems with the marketplace in Montana dimmed that possibility, said Richard Miltenberger of Mountain West Benefits, which advises businesses on health plans.
“There is a lack of confidence that the marketplace mechanism is going to be fixed in time for Jan. 1,” he said.
The website, www.healthcare.gov, is much improved, insurance officials said earlier this month, but the deadline for people to get coverage through the marketplace that’s effective Jan. 1 is Dec. 23.
Jim Nys, a personnel consultant in Helena, said many business owners remain confused about the ACA and how or whether it applies to them, in part because of misinformation about the law.
Nys said he’s conducted several workshops for employers and consumers around the state, and that he often ends up providing very basic information about the fundamental contents of the law.
“The vast number of (small) employers haven’t even got the information that it doesn’t really apply to them,” he said.
“The administrative burden (for employers), the changes taking place are unprecedented,” Larson said. “There is a lot of work, a lot of changes and a lot of confusion.”