Tuesday, December 2, 2014

Why Isn’t Big Business Complaining About ACA? Answer: Self-Insurance

"Have you ever wondered why the largest companies almost never criticize the Affordable Care Act? That may be because they are getting a deal that the rest of us aren’t getting.

The mandate to provide health insurance to employees kicks in for large employers on January 1st and applies to smaller companies the following year. Surprisingly, firms that are large enough to self-insure (and pay employees’ medical expenses directly) can satisfy the mandate without covering hospitalization. They can also avoid paying for mental health care, the services of specialist doctors and even emergency room visits.

In a nutshell, the largest firms can offer the skimpiest plans.

Perhaps aware of the embarrassing implications of these loopholes, the Obama administration made an election eve announcement that there would be limits on the ability of firms to exploit them going forward. On Election Day, a Treasury Department notice alerted employers that any health plans not already finalized will have to cover hospitalization and doctor services—but not other benefits that are required of small-employer plans and plans purchased by individuals.

The timing of these announcements suggests that the administration wanted absolutely no media attention for them. Who is going to pore over changes to Obamacare technicalities when exciting election results are coming in? There are two issues here that the administration doesn’t want discussed: Why does the law have a huge gaping loophole for the largest companies? And how is the Obama administration able (once again) to re-write the law without any act of Congress?

If you work for a self-insured company and have an above-average income, you probably don’t have much to worry about. Employers are going to provide higher-income employees reasonably good health insurance in the future, just as they have in the past. But if your income is below-average, you could end up with worse coverage than you had before." - Obamacare’s Gift to Big Business: The Largest Firms Can Offer the Skimpiest Health Plans, The Independent Institute, 11/25/2014

Link to the entire article appears below:




1 comment:

  1. Many of them aren't functionally self-insured. They re-insure with a commercial insurance company. It's a back door to ERISA protection.