News From Terre Haute, Indiana

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July 9, 2013

Seminar tries to navigate Affordable Care Act

TERRE HAUTE — Confusing and complex.

That’s how some people described the Affordable Care Act Monday after attending a small business seminar focused on health care reform.

Patrick Carney, vice president of employee benefits at Old National Insurance in Terre Haute, presented the seminar, which was hosted by Indiana State University’s Scott College of Business. Twenty-five people attended.

Employers with fewer than 50 full-time equivalent employees are exempt from the mandate faced by large employers that they provide health benefits for their workers (or pay penalties).

But small businesses still will be affected by the law, Carney said. Two big issues include community rating and federally facilitated public exchanges (now called the “marketplace.”)

A community rating is a new way of rating a business’ health plan by insurance companies, based on factors excluding health condition, industry, health status, gender or claims history.

It affects employers with two to 50 employees in 2014 and 2015, and groups with two to 100 employees in 2016 and beyond.

Factors considered are age, geographic area, tobacco use and family status.

Insurance carriers will determine their own community rates, which will vary by geographic region and plan type. Vigo County is in geographic Region 9 in Indiana, which also includes Clay, Parke, Sullivan and Vermillion.

“Community rating will be one of the biggest impacts to that small employer” because it affects how insurance companies will be able to rate small businesses going forward, Carney said.

“They can’t rate you due to health status,” and they won’t look at health claims anymore, he said. It’s a community rate.

The net impact, he said, is that groups who are healthy are likely to see their rates go up, while those with health problems and higher risk will see their rates go down.

Insurance companies estimate that 45 percent of small businesses in Indiana will probably see premiums go up 15 to 35 percent, and some employers will see rates increase by more than 50 percent, according to Carney’s presentation.

Small businesses “are going to be shocked” if they are not in tune with these changes that could affect them, he said. They need to be educated on the Affordable Care Act, he said.

There’s also concern that younger, healthier workers will continue to not buy health insurance because they will not want to pay higher rates, Carney said.

Firms that self-insure are not subject to the community rating rules.

For small businesses that don’t offer health insurance to employees, Carney suggests they work with an adviser to educate employees about the law and the insurance options available. Under the Affordable Care Act, “Every American has to have health insurance,” Carney said.

Employees should be informed about the existence of the public exchange and  potential eligibility for premium subsidies, which are available if household income is at or below 400 percent of federal poverty levels.

Carney has presented 30 seminars on the ACA in Vigo County over the last three months. “We plan on doing one a week for the next three months, just to get the small and larger employers prepared,” he said.

Among those attending Monday was Richard Kennel, president of Associated Psychologists, which has 13 employees.

While Associated Psychologists won’t be directly affected, at least in the short term, “I imagine they may eventually start bringing the definition of small business down from 50 to 25,” Kennel said.

While he found the seminar helpful, the Affordable Care Act, “is so incredibly complicated and complex, it will probably cost more and not provide the benefits it was supposed to. … We’re reinventing the wheel,” he said.

Linda Storey, a CPA with Smith and Co. in Terre Haute, attended to learn more about the law. “It doesn’t really affect us, but we have a lot of clients who have questions,” she said.

There are still many unanswered questions with regard to the federal health law, she said.

Health insurance is a good thing and “we want everybody covered,” Storey said. But in terms of implementing the new law, “it’s going to be a challenge, I think, to get everything straight and get everything going in the right direction.”

Also attending was Myra Wilkey, executive director of Mental Health America of Vigo County. After the seminar, she said, “I think I have more concerns now then when I went in because of the gray areas that haven’t been determined yet and what the impact financially will be” if the agency decides to offer health care to all if its employees.

ISU’s West Central Indiana Small Business Development Center hosted the event at Federal Hall.

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