Health Care

2 Years Later, ACA Effects Mixed, Local Experts Say

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YOUNGSTOWN, Ohio – A full two years into implementation, the effectiveness of the Affordable Care Act is mixed at best, say specialists who advise clients on how best to control their costs and provide health coverage for their families and employees.

Most businesses and households have adjusted to the change because new rules approved this year have given some companies more time to enroll in ACA plans.

Meanwhile, the cost of premiums for those enrolled in group insurance plans vary based on participants’ overall health, age and risk of the group, advisers say.

Ray Kashmiry of R. Kashmiry and Associates, Boardman; George Morris of Morris Financial Group, Salem; Bob Gearhart Jr., vice president of DC Wellness, Boardman; and Bill Scofinsky, director of health plans for the Chase Agency in Boardman, point out that some aspects of the law have worked but others have fallen short.

Small companies – that is, those that employ 50 or fewer – are not required to offer health benefits to their employees under the Affordable Care Act, otherwise known as Obamacare, relates George Morris, president of Morris Financial Services. Those that have offered coverage can renew their existing plans outside of the ACA marketplace, but small businesses that haven’t and are considering group plans must shop through an ACA exchange.

“Small groups are doing everything possible to stay out of the ACA,” Morris says.

That’s because the small-group insurance segment has found that costs and premiums under ACA plans are far more expensive than their existing plans, according to Morris. A survey conducted earlier this year showed that 82% of the small businesses polled responded that it would cost them more were they mandated to purchase an ACA plan versus their current insurance policy.

“The pricing isn’t there yet,” Morris says. “Those that carry the old legacy policies before the ACA kicked in are doing everything they can to keep them.”

Morris assessed his own company’s insurance policy and compared it to what it would cost on an ACA plan. “My renewal was raised in the middle single-digits,” he says. “My option was 50% higher under the ACA.”

Unfortunately, these options don’t extend to small companies looking to provide coverage to employees for the first time, Morris notes. “Their only option is to buy an ACA plan,” he says.

Still, Morris says he’s confident that many of the flaws in the law will be worked out in the near future as clients and providers become more aware of the changes. And, he notes, the law has benefited individuals who couldn’t afford insurance before the law took effect in 2014.

“We’re optimistic and helping our clients,” Morris says. “It’s not as bad as everybody thought, but we haven’t had the real crisis yet because of transitional relief.”

By 2017, the goal is to have both small and medium-size companies that offer health coverage enrolled in ACA plans, Morris says, noting significant changes to the small-group market are looming. Initially, medium-size companies – that is, those that employ between 51 and 99 people – were scheduled to move to an ACA plan for 2016. That deadline is now extended to 2017, he says.

“The group business has definitely changed,” says Ray Kashmiry, owner of R. Kashmiry and Associates. The firm helps large and small groups select health plans that meet their needs. “Our clients are staying right where they are with their non-ACA plans,” he says.

About 90% of Kashmiry’s small-company clients are witnessing only single-digit percentage increases by renewing with their existing carrier. “Some had a 3% to 4% reduction,” he says. “Others saw an increase between 6% and 12%.”

Kashmiry qualifies that statement by noting rates vary based on group risk, average age and demographics of the group, and the number of claims filed. “The ones with serious claims issues can hurt,” he says, noting premiums in these cases could rise significantly, forcing an employer to seek a policy with higher deductibles to keep costs down.

Midsize companies were granted a reprieve of sorts this October when President Obama signed the Protecting Affordable Coverage for Employers (or PACE) Act. This measure extends the deadline to 2017 for this group to sign on to an ACA plan. The original deadline was next year.

“It would expand to the 51-to-99 market,” says Bob Gearhart Jr., vice president of DC Wellness. “That would have a negative impact on our customers.”

While PACE delays the community rating system for these employers until January 2017, there are other ACA mandates that companies must prepare for this year related to additional reporting requirements and administrative mandates, Gearhart notes.

“During the first quarter of 2016, most employers will have to fill out a 1094-c form,” Gearhart says. The form is a new Internal Revenue Service requirement that eligible employees who receive health benefits through their company fill out personal information on themselves and their dependents.

“For employers, this could be a long process, especially if there’s high turnover in a company,” he says. “It’s going to take a lot of people to review and file them.”

Gearhart describes the results of the ACA to date as mixed, citing limited guidance and delays from the federal government. “The other half of the bill focused on providers, and that’s improved,” he explains. “We continue to see improvements on the provider side on the quality of care, outcomes and to control costs.”

Bill Scofinsky, director of health plans at Chase Agency, says that individual enrollment numbers have risen significantly and the ACA has generally been a success, notwithstanding the challenges it’s presented.

“This has been a challenge for everyone: business owners, employees. It’s changed dramatically,” he says. “It’s really impacted people on a case-by-case basis. Overall, I’d say it’s had a positive impact.”

If he’s seen a single constant running through the system, Scofinsky says, it’s that health care costs aren’t about to go down, especially employee plans. “We’re helping small-business owners decide whether it’s better for them and their employees to offer an insurance program.”

If the business is not subject to penalties for not providing coverage, then it’s possible that employees would be better off shopping for plans on the individual marketplace, Scofinsky says. “Some find that their employees are better served in the marketplace,” he says.

Regardless, confusion abounds when it comes to the ACA law, even two years into its execution. “There are options to choose from,” Scofinsky says, “but finding the right plan to suit their needs is the key.”

Critical to the entire process are individuals and businesses working closely with a health insurance adviser capable of helping clients appreciate what’s available and the tax implications.

“We’ve dedicated the time to be certified, trained and knowledgeable,” Scofinsky says. “The law is likely here to stay and we need to be the best we can be to help our clients and future clients.”

Published by The Business Journal, Youngstown, Ohio.