Health care law may increase Eagle County’s costs
EAGLE – The recently-passed national health care bill has “affordable” right in its title. Ironically, it’s going to raise insurance costs for employers almost immediately.
Eagle County Commissioners Peter Runyon and Jon Stavney – who oversee a generous employee-insurance program for nearly 500 employees and several hundred other family members – heard a report Monday about some of the health care bill’s requirements and costs.
Rusti Pfaffenhauser and Jim Breitbach, of Denman Employee Benefits Specialists, said there’s still a lot of uncertainty about the bill’s effects on employers, and that Congress still has work to do before many elements of the bill become law on Jan. 1, 2011. The bottom line, though, will be increased costs.
“We don’t see anything about cost containment efforts in this bill,” Breitbach said.
That’s something Congress must take up, Runyon said, adding that failure to address costs will be a “huge mistake.”
The effects of the new law will hit the county the same time they hit other employers – on Jan. 1. The first changes won’t be too big, and will be felt primarily in the mandates to expand coverage to older adult children who are still in school, and elimination of caps on the maximum payments anyone insured by the county can add up in a lifetime. The limits on annual pay outs will also rise.
Eliminating the caps on lifetime benefit payments will raise rates for individuals slightly, Breitbach said, but they will go up.
Pfaffenhauser said relaxing limits on annual insurance payments might require the county to re-think its current limits on chiropractic care, physical therapy and other services. Those services might have to be eliminated altogether to avoid the new, higher maximums.
Individuals will also see payments for over-the-counter drugs disappear from their “flexible spending” accounts, among other changes.
In the next couple of years, the county may also have to revise its benefits plan so it doesn’t end up paying a federal tax for having a so-called “Cadillac” health plan.
“If that happens, you’re going to see us trade that Cadillac in for a Buick,” Stavney said.
The big change, though, comes in 2014, when all Americans will be required to buy some sort of health insurance, either privately, through their employer or through yet-to-be created “exchanges,” essentially not-for-profit insurance companies managed by the states.
Pfaffenhauser said that as the law now stands, there’s little incentive for employers to continue their own health plans when the exchanges are created. Eagle County, for instance, could write a penalty check of about $1 million and require employees to buy their insurance through the exchanges.
The way the complex formulas are written now, there’s also little incentive to have many, if any, lower-paying or entry level jobs on the payroll.
Runyon said the county’s insurance plan is now a major draw in recruiting employees, and asked how that might change under the new law.
“The government’s going to make us make changes,” county human resources director Lisa Ponder said. “It will require different thinking.”
But, Pfaffenhauser said, the county can cope with the new law’s effects on its employees.
“The sky’s not falling,” Pfaffenhauser said. “This is manageable, and Eagle County will come out better than most. We’re going to be proactive about this.”