An American Health Policy Institute report reveals that over 105 million Americans will find health care plans offered on the public exchanges to be unaffordable when both premiums and deductibles are taken into account, and 10.4 million employees who head up a family face an average family premium and deductible that could consume more than 9.5 percent of their family income. Under the ACA, an employer-sponsored plan with premiums less than 9.5% of an employee’s income is deemed "affordable", and therefore does not assess that employer a penalty for offering unaffordable health coverage.
In spite of promises of broader coverage and subsidies under the ACA, millions of people still face serious challenges in paying for health care purchased on the public exchanges.
Health care costs saw a rapid increase from 1998 to 2005, which forced businesses to shift more costs to employees. Part of that cost-shift was also to make workers better health care consumers, armed with more information about the true costs of health care. But employer costs are still rising, twice as fast as inflation. These rising costs add to the affordability or unaffordability of health insurance plans
The Health Policy Institute survey points out some very interesting scenarios. For some 20.2 million nonelderly adult Americans who currently have no health insurance and who might seek coverage on the public exchanges:
11.5 million (56.9%) will see an average ACA premium and deductible that would consume more than 9.5%of their individual income–for 7.4 million (36.%), the average ACA premium and deductible would consume 15.5% or more of their individual income. Almost 96% of the 11.5 million held jobs in 2013; 73% in the private sector, 18.3% were self-employed, and 8.7% worked for the government or armed forces.
9.4 million (46.%) of the 20.2 million nonelderly adult Americans with no health insurance would find the average employer sponsored coverage affordable and the average ACA plan unaffordable, while 8.8 million (43.6%) would the average ACA plan affordable and the average employer sponsored coverage unaffordable; 2.0 million would find both types of coverage unaffordable.
Last month, the Baltimore Sun ran an article about the high costs of prescription drugs on the health exchanges. In a survey conducted by the Partnership to Fight Chronic Disease, participants said it cost them less to purchase medications directly from the drugstore using coupons and other discounts, rather than through their Exchange insurance plans. Officials with the Maryland Health Benefit Exchange declined to comment on the survey, as did CareFirst BlueCross BlueShield, the dominant carrier on the state exchange.
The survey looked at mid-level or silver plans, sold on the state exchange. Insurers pay about 70 percent of costs under these plans, while the policy holder pays the rest. The survey compared those plans to what people on a typical employer-sponsored plan might pay for drugs. The comparison revealed that on, average patients with one or more chronic conditions would pay 66 percent more for medicine than if they were on an employer's plan. People with one chronic condition would pay even more - 89%. The sickest Maryland patients, with four or more chronic conditions, would pay the most for medicine, $1,391, compared with $972 under an employer-based plan.
In reviewing the study, Gerald Anderson, a professor at the Center for Hospital Finance and Management at the Johns Hopkins University said that people who can't afford their medicine may not take it all or cut pills in half. That may result in them becoming sicker and end up in the hospital or emergency room, which would of course cost more than managing the disease with drugs.
Recently, after my very small employer’s health care plan premiums nearly doubled, I could no longer afford to carry my husband as a dependent on my plan. We had to find other coverage – quickly. I went onto the Maryland Health Exchange website to look for and compare available plans. Honestly, I was shocked. The basic rule of thumb (the higher the deductible, the lower the premium, and vice versa) certainly held true. However, I found no mid-level plan that had an individual deductible less than $2000.00; and after the deductible, no plan I saw paid better than 70% of costs, and included rather high co-pays on prescriptions. For many, many people, the premium on a plan like this would still be too high. In order to get a premium they can afford, the deductible would have to be much higher. Such plans would not be more than catastrophic coverage. You may have a monthly premium you can manage, but if you’re essentially out of pocket for thousands of dollars when you consider the deductible and then prescription co-pays on top of that; it’s far less affordable we’ve been led to believe.
Few people would argue that our health care system is broken; and I certainly have no viable fix for it; however, it doesn’t appear that the ACA has fixed anything. Remember, the law has no provisions that affect the actual cost of health care (treatment, prescription drugs, diagnostics, etc.); it only provides a scheme to lower premiums by forcing more people to be covered – thereby more people paying into the system. It remains to be seen if that scheme will truly work. Many more young and healthy people will have to buy into the ACA in order for the promise of "lower premiums" to be realized.
Thursday, February 19, 2015
Unfortunately, it’s a train barreling right at them
There’s normally a fair amount of attention focused on federal laws and regulations governing the employment relationship. After all, the majority of businesses fall under the broad umbrella of federal action; whether it is by Executive Order (fiat?), legislation or regulatory agency rulemaking. However, there are 50 states (and hundreds of localities) that consider and pass laws every year in their jurisdictions that affect many businesses within those states and localities.
In my various roles as an HR pro, government and legislative affairs director/committee member for our local Chamber and our local chapter of SHRM, I closely follow these things in my state. The 2015 Maryland General Assembly session began last month, and our elected state officials are hard at work, stoking the engine of a fast-moving train aimed at overregulating every aspect of business. I really have to wonder what their real purpose and motivation is when I see some of these bills. Let’s take a look at some of them (in no particular order).
Maryland Healthy Working Families Act
Businesses with 9 or more employees must provide paid sick and safe leave. The leave will accrue at the rate of at least 1 hour for every 30 hours worked, up to a maximum of 56 hours per year. It would be a wonderful world if all employers – of all sizes – could afford to do this for all their employees. That’s just not reality. This bill would hurt the very businesses that provide the largest number of jobs – the small business. In addition to the leave, the bill requires a fair amount of documentation, notices to employees, per pay period accounting of leave balances, etc. Many small employers do not use payroll services, but process payroll in-house, creating additional time and cost for this documentation.
Noncompete and Conflict of Interest Clauses
Would ban non-compete and conflict of interest provisions that restrict the ability of an employee to enter into employment with a new employer, or be self-employed, in the same or similar business or trade as being against the public policy of the State. Such clauses or agreements are standard fare, especially in highly technical and scientific fields. Does it make sense to prevent businesses from protecting their interests for some period of time? The business invested the time and money into producing product, service or creating intellectual property. Shouldn’t it be allowed to prevent a former employee from unfairly benefiting from that sweat equity for some reasonable amount of time, or from taking that product or service to a competitor?
Fair Scheduling Act
Requires businesses to provide employees with a work schedule at least 21 days before the first day the employee is scheduled to work; post a notice at least 21 days before the start of each workweek that shows the start of each workweek, and includes all shifts of all employees, including those not scheduled to work or be on call for that week; notify employees of any changes to their schedule, and provide employees with a new work schedule within 24 hours after making a change to the initial schedule. It would also prohibit an employer from requiring an employee to work hours not included in an initial schedule unless the employee consents to it in writing and would prohibit requiring the employee to find another employee to cover hours he/she is unable to work. And it gets better: an employee can request that the schedule be changed and limit his/her hours to any hours the employee chooses- and the business must consider this and respond in writing with reasons. The employer also cannot change an employee’s work schedule within 24 hours of the first shift of the schedule. If it does, the employer must pay the employee 1 hour of "predictability pay" for each shift that is changed. What are they thinking? Want to turn every retailer, health care provider and manufacturer on its head? What could they possibly be thinking? Scheduling 21 days in advance? Seriously? And who thought up "predictability pay"?
Overwork Prohibition Act
Changes the requirement to pay overtime for hours worked over 8 in a day, rather than the current requirement of overtime pay for hours worked over 40 in a workweek. It also would require overtime pay on the 7th consecutive day if the employee has agreed to work 7 consecutive days; works less than 11 hours after the end of the immediately preceding shift, or within the 11 hour period immediately following the end of a shift that spanned 2 days. Also, an employee can decline a request to work more than 6 consecutive days, or work more than 55 hours during a workweek or work hours that occur less than 11 hours after the end of the preceding shift or during the 11 hour period immediately following the end of a shift that spanned 2 days. It’s not like the Fair Labor Standards Act isn’t already massively complicated to properly comply with, now our elected officials want to not only hamstring businesses, but add multiple layers of complexity on top of that. Again, where is this coming from? So, we can’t require overtime regardless of business necessity. We can only say pretty please, and the employee can still refuse. Amazing.
Nondisclosure Agreements - Prohibition
Prohibits nondisclosure of proprietary information agreements or otherwise create any expectation that a confidential relationship exists with respect to proprietary information. What?! I’m at a loss……
Wage Disclosure and Discussion Protection
This bill would prohibit an employer from taking any adverse employment action against an employee in regard to an inquiry about or disclosure or discussion of an employee's wages, or another employee’s wages. It would also prohibit action against an employee who inquires about another employee’s wages, discloses his/her own wages to others or discusses another employee’s wages (if those wages have been disclosed voluntarily). To name just one issue with this bill, if I reveal to my co-worker my wage, it doesn’t mean I want that coworker to announce that information to everyone else; yet would be protected in doing so. Additionally, the National Labor Relations Act already expressly prohibits employers from disciplining employees from discussing wage, hours and other conditions of work. I see no valid reason to create another cause of action on this issue.
These are just a few of the many bills before the Maryland General Assembly this year – so far. The deadline for submitting bills is yet to come! Each year, as I read through the pending legislation, my hair bursts into flames. This year I think I’m reaching total spontaneous combustion. It appears none of the sponsors of these bills has ever run a business, has no clue how to run a business. Another completely confusing point? All this is from a majority Democratic state legislature, in a state that just elected a Republican governor.
Thursday, February 12, 2015
The U.S. Department of Labor reports that the number of workers who belong to labor unions has decreased slightly in the past year. In the United States, total union membership stands at 14.6 million, which was a decrease of about 0.2 percent from last year. In all, about 11 percent of the workforce belongs to a labor union. In contrast, in 1983, the first year data was available, the union membership rate was 20.1 percent, with 17.7 million workers belonging to unions. The report also shows that the current union rate among public sector employees is over five times higher than the union rate for employees in the private sector. 35.7 percent of public-sector workers are members, compared to just 6.6 percent for the private-sector.
This is another indicator of the waning influence of Labor in the American workforce. But what might be the reason for the continuing decline?
Unions have refused to adapt to the modern workplace. Collective bargaining means one-size-fits-all. They don’t recognize individual contributions. Unions demand that management base promotions and raises on seniority not merit. However, today’s employees expect to be rewarded for what they bring to the table. More than 70 percent of the current private labor force is under the age of 45. Younger workers tend to be highly mobile, better educated, in white-collar or "new"-collar (computer, technical, etc.) careers. Yes, they care about wages, but also feel such issues as gaining new skills, having a say in how their jobs are done, career advancement, and quality of life both on and off the job, are just as important. Many simply don’t see a union contributing positively to those needs.
I also believe more of today’s workers realize they can advocate and negotiate for themselves much more effectively and not have to pay a union to do it for them, and end up not having much control over the outcome.
Today’s more competitive and global business environment also plays a part. When unions raise labor costs and business has to compensate by raising prices, consumers can shop somewhere else. Unions that insist on uncompetitive wages may wind up like Hostess's Bakery Union - with unemployed members.
But I have to believe that the tens of thousands of federal, state and local employment laws and regulations – with new ones being passed all the time – play a huge role in the decline of unions. There was a time in this country when unions seemed necessary. Many businesses took advantage of and abused workers. But business wised up – both voluntarily and by force. It’s no longer necessary to have a union to coerce a business into paying fair wages or maintain a safe work environment. Laws and regulations have done that. In many ways, government has assumed the responsibility for the things traditionally handled by unions. Unions have therefore become less necessary for most workers.
All of these reasons (and more, I’m sure) are also the reason for the drastic antics of labor unions (think about the OUR Walmart actions over the past couple of Black Fridays), and the vast overreach of the NLRB. Union membership is declining and these folks are desperate to stop and reverse that decline. Problem is, they continue to use the same old model, the same old tactics, which many are now seeing as tiresome at best, ineffective and downright unnecessary and abusive at worst. We can hope that the tide has turned and that the smart American worker sees more value in his ability to guide his own future rather than hand it over to those who care more about their political influence and the collection of dues to support that influence than they do about the individual worker.
Thursday, February 5, 2015
And the beat goes on….
Wellness on Trial
As I noted last week, a hearing in the Senate HELP committee convened to address the EEOC’s attack on employer wellness programs. The "EEOC is sending a confusing message to employers—reliance on Obamacare's authorization of wellness programs does not mean you won't be sued," according to Chairman Lamar Alexander (R-TN). He went on to say "we want to make sure we don't have a countervailing move going on in the government to discourage [wellness programs]." Witnesses at the hearing testified to the value of such programs and expressed concern with the issues raised by the EEOC’s recent litigation. Former EEOC General Counsel Eric Dreiband of Jones Day said the "EEOC's flip-flopping, ongoing and seemingly never ending 'examination,' and litigation [of wellness programs] perpetuate confusion and uncertainty," and recommended that "if the executive branch of the government will not end this regulatory mess, the Congress should do so by enacting appropriate legislation." Senator Alexander vowed to work on legislation to clarify the law and enable employers to offer voluntary wellness programs with financial incentives if the EEOC’s general counsel continues to sue employers. It’s been reported that EEOC chair Jenny Yang recently said "We know it's important for us to provide guidance in this area," and "we are working to get something out as soon as we can, but it's hard to predict exactly when that will be." Truly a shame they can file a lawsuit quicker than they can provide guidance to prevent one. Hmmmmm.
When the NLRB passed down its ruling on the "quickie election", the business community clearly voiced its displeasure as expected. Now, as reported by Littler and others, House and Senate Republicans are considering whether to employ the Congressional Review Act procedures for overturning the NLRB's rule. This could at least get the measure to the President's desk. Under the Congressional Review Act, Congress can pass a resolution nullifying a rule by a federal agency under an expedited procedure that would only require a majority vote in both houses. So, the normal sixty-vote floor in the Senate needed to shut off a filibuster is not necessary. Also, the Senate HELP Committee Chairman Lamar Alexander has reintroduced the NLRB Reform Act (S. 288), which includes increasing the NLRB from five to six members with each party controlling three seats. Technically, this would alleviate the wide swings that take place when the party majority changes after elections.
Regardless of outcomes, this is getting interesting!