HOUSTON – Health insurance changed dramatically last week with the implementation of the Patient Protection and Affordable Care Act and the City of Houston is looking into how it might benefit city workers.
Houston Alderman at Large Barry Springer pointed out it might be advantageous for the city to supplement health insurance for city workers by giving them a raise and letting them buy personalized health insurance on the new national insurance exchange.
“Instead of the City of Houston paying for it, we might want to let the federal government pay for it,” said Springer. “We might be able to give them a $50 raise and they go out and purchase insurance on the exchange and do better.”
Springer said single coverage for some city employees could probably be purchased for around $10 to $20 a month.
“We need to look into the details and I'm sure our insurance agent will tell us this is not a good idea,” said Springer, “but it might be to our advantage to let the federal government pay for it instead of the people of Houston.”
Insurance rates vary from individual to family and on the level of coverage.
The City of Houston has approximately 37 full-time employees and they pay about $250,000 a year in premiums. Houston is under the 50-employee threshold and does not have to provide health insurance to city workers.
Under Option 1 of the city's current health insurance with Blue Cross has a renewable rate of $395.30 and $115.12 for Gulf Guarantee. City workers can get an additional 3-percent off their premiums if they are tobacco free.
The city voted to adopt the current premiums and policy at their Sept. 3, board meeting. That decision was made after more than two months of discussion and review of insurance rates.
City Clerk Janie Dendy said the city's insurance is fully funded by city workers.
“I think we need to look at what is actually being offered out there before we do anything,” said Dendy, who worked in medical billing with health insurance for 29 years before taking the job of City Clerk this summer. “I've heard a lot of numbers out there about the Exchange. We need to figure out what is best for our employees.”
Springer echoed Dendy's concerns and he pointed out while the city doesn't pay a lot in salary and wages, Houston does offer employees good insurance.
Chris Turner, and independent agent with Turner Insurance of Houlka, said the Affordable Care Act has leveled health insurance rates for similar coverage.
“I do think we need to let the dust settle and see actually what the new rules and rates really are,” said Turner. “Yes, the rates for a 27-year-old single male making less than $27,000 a year could drop from $300 a month to $8 a month under the current structure being presented on the exchange. That is why the City of Houston and people across the nation are looking to the exchange. It might be a good fit for some people.”
But Turner said insurance is complex and most people don't understand the details, which can be so important when a customer has a claim.
“I don't know how the average person can go on the Exchange – when it is working – and truly figure out what is best for them,” said Turner. “I've been in this business a lot of years and I still have a lot of questions. I am particularly worried about young people and the elderly who may not understand what they are buying and how they will use it.”
Turner also said most federal exchange “navigators” have been give three-days of training in helping people pick a plan. He urged potential customers to talk to a local agent before going on the exchange.
Under the Affordable Care Act, everyone is required to obtain health insurance and the Federal Exchange has been set up to help the un-insured obtain coverage. Those who do not have insurance will be monitored and fined through the Internal Revenue System (IRS). The money would be taken from any income tax refund or a lien placed against the individual.
“But just like some people cheat on taxes and don't get caught, I expect there will be some people who don't pay for insurance and don't get caught,” said Turner. “I think we have got a lot of things to work out before we know exactly what is being offered and how it might help you.”
Turner also cautioned about giving personal information such as credit card numbers and Social Security numbers to anyone over the phone.
“There should be no rush to change insurance and we need to let the dust settle and see what is happening,” said Turner. “When people come to me seeking insurance, I advise them to look for two things.
“First they need to know who they are buying their insurance from and who they will be talking to when they have a claim,” he explained. “And please know how your insurance works and what it does and does not cover. Sometimes the cheapest is not the best.”
The Houston Board of Aldermen took no action at last week's meeting on health insurance for city employees.
The Patient Protection and Affordable Care Act (PPACA) was passed by Congress and signed into law by President Barack Obama on March 23, 2010.
Health care reforms mandated by this law will ultimately expand coverage to millions of Americans and will require a large number of changes to the insurance industry.
These changes will affect all Mississippians in one way or another. The Mississippi Insurance Department and other Mississippi state agencies are diligently analyzing the many components and implementation timelines for the benefits mandated by PPACA.
The first important date for the healthcare law has already passed. On Oct. 1, health insurance exchanges went live on the Internet. In addition to providing all the options available from state exchanges, the site –www.healthcare.gov – also allows users to find out whether their income level qualifies them for government aid.
The day also marked the beginning of a six-month enrollment period which allows people to choose the insurance plan they want for 2014.
Other deadlines include:
- Dec. 15. If you want your insurance coverage through the healthcare exchanges to start by Jan. 1, 2014, this is the date by which you must have enrolled and paid your first premium.
- Jan. 1, 2014. Insurance coverage begins for those who have enrolled. Those who do not have insurance could face a $95 penalty or 1-percent of their income, whichever is more.
- March 31, 2014. This is the last day of the six-month open enrollment period for the healthcare exchanges. People can still enroll if they have a “qualifying” event, such as divorce, losing a job or having a child.
- Oct. 15, 2014. Starting in 2014, this date will be the start of the open enrollment on the health exchanges every year.
- Dec. 7, 2014. Starting in 2014, this will be the closing date for opening enrollment every year.
- Jan. 1, 2015. By this date, if you do not have insurance coverage you will pay a penalty of $325 or 2-percent of your income, whichever is higher.
- Jan. 1, 2016. By this date, the penalty for not having insurance will rise to $695 or 2.5-percent of income, whichever is more.
For businesses, the important date is Jan. 1, 2015. On that date, all businesses with 50 or more full-time employees will have to offer affordable, comprehensive coverage of face a $2,000 fine.