Benefits and Compensation

Health Reform Action to Correct 30-hour week Unlikely Before 2015

Congressional aides from both chambers of Congress and both parties said they do not expect immediate action on changing health care reform’s 30-hour a week definition of a full-time workers, or on banning “skinny” health plans that do not cover major categories of health benefits. The staffers predicted that even if enrollment is lower than projected and, for example, even if insurance rates increase higher than expected, the law will not be considered a failure and repeal will not be considered before 2015. Any dysfunctions would more likely be remedied in second rounds of rules, guidance or legislation commencing in 2015, they told reporters during an Aug. 28 health policy sponsored by the Alliance for Health Reform in Washington, D.C.

Indicators of Failure and Success

Health care reform is not going to be stopped before implementation of state-based health insurance exchanges plays out, a GOP staffer said at the off-the-record briefing. The bar is so low for success that a few million new covered lives will enable proponents to declare success. Excessive rates or anemic enrollment will be remedied later without threatening the existence of the law itself, the staffer said.

However, a health care reform system failure like: (1) a privacy problem that causes an exchange to pull the plug; or (2) health plans going under after becoming insolvent under reform mandates, could create political impacts; that is, they could alter 2014 election results, the staffer said.

Success of reform can be measured at milestones: Oct. 1, the date enrollment in the exchanges begins; Jan. 1, the date exchange coverage takes effect; and in subsequent months, when enrollees exhaust deductibles and coverage begins to kick in, one staffer said.  

30-hour Definition of FTE

Changing reform’s 30-hour definition of full time worker to bring it in line with most businesses’ 40-hour week has been suggested in legislation (S. 701, sponsored by Sens. Susan Collins, R-Maine, and Joe Donnelly, D-Ind.).

But a staffer said the 30-hour definition was instituted to prevent gaming of the system, one staffer said, because if they had allowed a 40-hour week, employers could have easily instituted 39-hour weeks and had de facto full time workers while evading the intent of the law.

A GOP staffer said the delay on enforcement of the employer mandate removed any impact of the 30-hour definition, making the issue moot. Therefore, one should not to expect action on that item until 2015, he said.

Removing Spouses from Coverage

The well-publicized moves by UPS and the University of Virginia (among other large employers) to remove some spouses from company coverage, and attributing some of that to health care reform, was an attempt to use reform as a scapegoat to cover changes the employer was already planning to make, some of the more left-leaning staffers said.

Business lobbied hard to retain the ability to offer coverage during drafting of the health care reform law, one staffer said. If a company believes actions like reducing spousal coverage or ending dependent coverage would not hurt their ability to hire and retain the best employees, they have the right to take the risk of doing so. He did say, however, that companies were using health care reform as a “scapegoat” when making decisions like this seem less “cold and heartless;” in such situations, he said, the company can sell the move to the public as a prudent business decision.

The staffers also said it was extremely unlikely that the expensive taxes on device manufacturers would be repealed.

Desires to Curtail ‘Skinny’ Plans

A Democratic staffer expressed sentiments that “skinny” plans were a mistake and allowing them was an oversight by the drafters of reform. Skinny plans are defined as “minimum essential coverage” and as such, they enable workers to satisfy the individual mandate. They also shield employers from reform’s expensive “no-coverage” penalty and could be popular among young healthy new entrants to the workforce who don’t expect high health bills.

On the other hand, they clash with the government’s intent for employers to continue to sponsor full health benefits and protect consumers from bills for expensive surgeries and hospitalizations (“skinny” plans tend not to cover these). The staffer favored passing a rule or bill restricting them.

Possible Incremental Changes

One speaker said a possible change would be to change the current policy of basing the measurement of what’s an affordable plan for families in group health plans on individual policies.

And another policy fix would be what happens to residents making less than 100 percent of the federal poverty limit (making them ineligible for reform subsidies to buy coverage on an exchange but still subject to the individual mandate) in states that refused to expand Medicaid (as ensured in the landmark U.S. Supreme Court decision upholding most of the health care reform law last June). In those instances, the staffer said, uninsured people will continue to present themselves to emergency rooms and create uncompensated care that will generate cost-shifting to private insurers and consumers.

The staffers expressed frustration about the mini-controversy kicked up when it was revealed that congressional staffers would lose their employers’ contribution to their federal employee benefits plan if the reform law was allowed to operate without a fix. If that occurred, one staffer noted, many staffers in his office would have migrated to other jobs. That crisis was fixed by a decree that allowed congressional staffers to remain under FEHP and not to go onto exchanges. It was noted that this was emblematic of the unintended consequences associated with health care reform implementation.

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