Thoughts on the Wall Street Article…

It is a difficult time for an employer.  With Health Care Reform looming in 7 months, almost every employer I talk to is nervous, concerned, worried – and looking for the loophole that allows them to continue to do what they are doing today.

Last week an article in the Wall Street Journal, click here, spoke to this.  The Concept?  The rules only apply to small groups;  large groups of 50+ employees can get around the law by offering “skinny” medical plans.  Which, in fact, is probably technically true.  Large Groups are required to provide unlimited preventive coverage, but not much more.  The lawmakers “assumed” that large employers would want to provide “high quality insurance.”  PPACA is poorly written in many instances.

So what’s a “Skinny Plan?” – a watered down plan that, as an example, doesn’t cover surgery, prenatal care and x-rays, and perhaps only reimburses $150 a day for a hospital visit.

Before jumping on the “someone found a solution!” bandwagon, we need to look at this from a couple of viewpoints:

Employer- Everyone loves a good “loophole,” its the American way.  Philosophically is this the coverage you really want to offer your employees?  Many retail, temporary and restaurant groups currently offer “Limited Medical Plans” which are essentially the same thing, and will probably jump at the opportunity.  However, with the cost to attract, hire, train and retain a new employee estimated at between $3000-$5000, is this really the pathway you want to follow?

Government- Is this really a loophole?  Clearly the intention of the government regulators was to require employers to offer “comprehensive” insurance to all employees;  that’s why they came up with the fine/penalty/tax system – to prevent you from doing exactly this.  How long will it take the current administration to close this gap in a poorly written law?  Or will it be decided by the courts (who have supported the law and the administration)?

If and when the administration closes the loophole, or worse simply says the interpretation was wrong, will they then set an example and fine your company $2000 per employee retroactively?

Employees- Again, does this kind of approach match the philosophy your employees have come to understand about your company?  And what happens when they have a big claim, the surgery and hospitalization are not covered and they owe the hospital $40,000?  Will they decide they didn’t understand the insurance they bought, they weren’t informed, that both your company and the insurance carrier are “big Bad guys” – and sue everyone involved?

There are approaches being developed and designed to help us all survive Health Care Reform without closing our businesses.  I will be attending the National Health Underwriters meeting in June at Atlanta and expect to bring a lot of ideas back from that session.  More to follow… – Reeve