Column 54

Small employers with under 50 full time employees are concerned about health care reform and how the ACA (Affordable Care Act) will affect them.  It is important to note that these groups have never been required to offer health benefits, but many do so.  They do so primarily to attract and retain good employees, particularly in competitive industries.  Some employers feel a bit of a moral obligation, since under the old rules individuals may have been declined for coverage.

Most small groups that had renewals in the first half of the year, postponed their renewal until December of the 2014 in hopes that there might be some transitional relief.  To date nothing has happened.  There is legislation pending in CA, Senate Bill 1446,  that would allow small groups to continue with their pre-ACA plans for another year.  As of press deadline it is still makings its way through the legislature. 

If the legislation is passed, it is my understanding that it is permissive.  It does not require carriers to continue the plans.  So small employers will still have to wait and see what the insurance carrier decides about allowing that options. 

In the meantime, 3rd quarter renewals are in process for local small groups. Those that wish to take advantage of the small employer tax credit are disappointed to find that it is only offered if the employer sponsored small group plan is purchased through the SHOP.  SHOP is the small group option under Covered CA, also referred to as the Exchange.


An Exchange is designed to provide the enrollees to have access to multiple carriers under one umbrella.  There are private Exchanges such as California Choice and public Exchanges like the one under Covered CA (SHOP).

In northern CA, the only plan available under SHOP is the Health Net PPO.  This plan has a very limited provider listing, so should an employer choose this plan, the employees' access to physicians will be quite limited.  It is important for small employers to review the value of the tax credit with their tax counsel.  It may turn out that it is not worth reducing benefits for your employees. 

Originally it was rumored that there would be a "Blue" plan under SHOP in the summer, but that is not going to happen.

On the other hand, if your group has multiple locations and only a small minority in Redding, there is a potential advantage to using SHOP.  Under the SHOP, the employer can choose a benefit level (Platinum, Gold, Silver or Bronze) and allow the employees to enroll in one of multiple plans such as Kaiser, Health Net, Western Health Advantage etc.  This can be a good choice when "one size does NOT fit all".

As part of the ACA small employer plans are required to provide pediatric dental benefits to all enrolled children under the age of 19.  These plans have no annual benefit limit, therefore can be rather costly.  Rates can be in the $25 monthly range per child. There was supposed to be parity between the public exchange and the private plans.  This would provide a level playing field for the carriers that offered plans outside the SHOP Exchange.

As of this writing, this is not the case. Small employers that write through the SHOP are not required to include the pediatric dental benefit.  If your group has many children, this can be a big cost savings. Much like what was done in the individual exchange, a price advantage was created for those that buy through the Exchange.

Note to school districts and others who do not track hours worked:

In the recent edition of Benefits Quarterly there is reference to a lawsuit as follows: The Greenburgh Central School District denied a teacher requested FMLA (Family Medical Leave Act) because he failed (by three hours) to work 1,250 hours in the 12 months prior to the requested leave.  The school district based this on a calculation of the amount of time each teacher is contractually bound to work each day, multiplied by the number of days each teacher worked.  The teacher claimed he had worked from home and met eligibility requirements. Because the school district was unable to show the hours actually worked by the teacher he was found to be eligible for FMLA.

 

Note: All information in this column is provided" to the best of my knowledge" subject to final regulation by the respective agencies at press deadline.  Please submit questions to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .