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Employer Mandate Delay – The Impact?

Employer Mandate DelaySo what is the big deal with delaying the Affordable Care Act’s employer mandate for one year? How many people will not have access to employer-based coverage as a result? How many businesses would be paying a penalty for not offering affordable coverage to their workforce?

All good questions — and one new study attempts to provide a few responses.

According to the RAND Corporation, a nonprofit research organization, implications from delaying the employer mandate may be as follows:

  • About 1,000 fewer organizations will offer health coverage in 2014 (about 0.02% of all organizations within the U.S.)
  • 300,000 fewer people will have access to affordable insurance in 2014
  • Only about 0.4% of organizations who employ approximately 1.6% of the workforce will pay a penalty for not offering health insurance at all
  • An estimated 1.1% of organizations will pay some penalty for offering unaffordable health coverage (based on current employer contribution rates). This will affect less than 1% of the workforce
  • Due to the one-year delay, the federal government will receive $11 billion less in revenue

RAND also estimated that repealing the employer mandate entirely would result in federal revenue being reduced by about $149 billion over the next 10 years.

Giving employers one more year to digest the employer mandate is considered by many employers to be a welcome relief. However, this delay does prolong the uncertainty in which employers must operate while confronting the Affordable Care Act.

Here in Iowa, over 95 percent of employers who have at least 50 employees already offer health coverage so the impact of this delay affects a small number of the employer population.

Percentage of Employers Offering Health Coverage in Iowa

Additional data reflecting the current Iowa marketplace will be released soon in our 2013 Iowa Employer Benefits Study©, so stay tuned!

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Wellness Programs – It’s About Expectations

Overall Performance Rating Form 3Having a healthy dose of realistic expectations is extremely important in most every part of our lives. Whether it’s with school, friends, a favorite sports team, work, marriage, raising a family or any other life event, our expectations exist. The expectations we have might very well define how we react to the actual experiences that ultimately occur. If we have set lofty expectations about “fill in the blank,” we might be more susceptible to feeling disappointed and/or angry if the results are anything less than what we expected. This is all part of human nature, right?

The same thing applies to a big trend happening today in the workplace – wellness programs.

What are your expectations about workplace wellness? Do you believe such programs, when appropriately and thoughtfully implemented, will greatly mitigate your healthcare costs, improve workforce productivity and reduce absenteeism? Perhaps your expectations are, at a bare minimum, the associated expense of implementing these programs will be cost neutral. Maybe you feel these programs are a waste. From our 2012 Iowa Employer Benefits Study, employers shared their perceived ‘return on investment’ of the programs they currently have in place.

According to the “Workplace Wellness Programs Study” by researchers at the RAND Corporation, these programs only have a modest effect. This runs contrary to claims made by wellness firms that sell workplace wellness programs to employers. The report found that people who participate in wellness initiatives lose an average of only one pound a year for three years. Another finding is that employee participation in such plans “was not associated with significant reductions in total cholesterol level.” Smoking-cessation programs show some potential, but only “in the short term.”

RAND is a very reputable research organization and delivered this congressionally-mandated analysis to the U.S. Department of Labor and the Department of Health and Human Services. The report was released in conjunction with the final wellness regulations on May 29, 2013.

This 165-page report is extensive. Most likely, both skeptics and supporters of wellness will find ammunition to support their cause. As for me, I just appreciate having a reputable organization perform a relatively non-biased analysis with nothing to ‘sell.’

This report may help stabilize, to a more realistic level, any pre-conceived expectations each of us may have about wellness programs.  That is my hope…and expectation. What about you?

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Trust, but Verify

David P. Lind Benchmark“Fair and balanced.”

You hear this phrase from many different sources. It conjures up something within us that we all desire to have when making critical decisions. Understanding the pros and cons on any given issue is important to most of us. But do we really receive the “truth” or the “transparency” that will allow us to draw our own conclusions on the subject matter at hand? It really depends on the source of the information…so I believe.

The reason for this particular blog stems from a presentation that I recently gave at the “2012 Iowa Employment Conference” in Altoona. Much of my presentation focused on the health insurance trends in Iowa based on our annual studies. The trends by the way, are dismal at best, unsustainable at worst (another blog for later). When discussing potential solutions for employers, a few topics were breached such as consumer-driven health plans, wellness initiatives, and health reform measures. I mentioned that each topic will usually have many arguments (both pro and con), in addition to having both intended and unintended consequences. To know the subject matter well, I suggested to the audience to have a comfort level with their SOURCE of information (publications, media outlets, research organizations, etc.).

Much to my surprise, a hand was raised that followed with this question: “Which sources do YOU trust?” This question came out of the blue for me, but was asked in a thoughtful manner. I don’t quite remember my response that day, but since that presentation, I have had time to further reflect on this question. The word ‘Trust’ is defined in the Merriam-Webster dictionary as “assured reliance on the character, ability, strength, or truth of someone or something.” Another definition is “one in which confidence is placed.” I like both.

Regarding health care related stuff (including health insurance programs offered by employers), I TRUST a few particular sources. Each source has earned my trust over the years due to consistent research that attempts to factor out biases that typically are inherent in any type of research. Also, the authors of such research will generally disclose any potential outside influences that may mitigate the truthfulness of the results.

In no particular order, my short list of trusted sources is found below:

  • Health Affairs Journal – Many authors (national and international experts) write thought-provoking articles on highly researched thematic topics each month.  This is the gold standard because the information is fresh and relevant at all times. I also download their free podcasts and listen to them while I run in the morning. A subscription is necessary for this journal…but it is well worth the investment.
  • RAND Corporation – RAND provides objective research on many issues, including healthcare. Rand provides very innovative material…much of it can be found on their website at no cost!
  • Kaiser Family Foundation – Most information is at no cost…and there is a ton of information on many different health topics. A great go-to source!
  • Dartmouth Atlas of Health Care – The pioneer on the disparity of health care delivery in the U.S.

There are other sources that I highly value, but those sources (at least in my view) tend to be a level below the four mentioned above. Just know that the SOURCE of information is just as important as the content of the information being conveyed.

President Reagan adopted a signature phrase and made famous when discussing U.S. relations with the Soviet Union:  “Trust, but verify.” This phrase can also be applied to healthcare information and many other topics!