Health-insurance reform will affect county coverage

By KEVIN KOELLING
Managing Editor

PHOTO: Kevin Koelling

Merle Doogs accepts a plaque and congratulations from fellow County Councilman Steve Goodson after a regular meeting Thursday. It was Doogs’ last meeting after 16 years of council service, which he called “a good learning experience.” Family members and friends joined him for refreshments after the meeting was adjourned.

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TELL CITY – The county commissioners got a look at how new health-insurance regulations will affect the county during their regular meeting Nov. 21.

For one, employers who issue fewer than 250 W-2 statements may but aren’t required to report the value of health insurance on those documents, explained Cathy Dunn, president of Dunn and Associates Benefit Administrators of Columbus.
“Does that mean it’s taxable?” she asked. “Not yet, however it is on your W-2. Who knows? At this point in time, it’s not taxable.”
County Auditor Connie Berger said the benefit won’t be reported on the document for this year.
The fact that some employers will report it while others won’t may cause confusion in the community when people compare their earnings reports, Dunn said.
The law requires everyone to use the same definitions of terms, she explained, and she was providing a glossary of those to Berger along with summaries of benefit coverages and plan descriptions for distribution to employees.
“We all hate mandates,” Commissioner Jody Fortwendel said, “but are these good mandates? Are these things that are going to level the playing field for all insurance companies?”
“I don’t really have a problem with what they’ve done so far,” Dunn replied. “For example, in 2014 there will not be any pre-existing conditions for a new employee. I’m OK with that if everybody’s playing by the same rules. My personal opinion on health-care reform? They’ve reformed the insurance market but the reforms do not address the outrageous costs of medical care. There are some providers out there that gouge, and they get away with it. I think there’s still a need to rein in the costs.”
She said Medicare allows $300 to $400 per week while “we’re getting bills … of $50,000 a week” for dialysis. “There’s got to be some way to control this,” she continued. “But if you’re the only dialysis provider in town, you can charge what you want … I don’t mean to pick on the dialysis providers, but that’s an example.”
She doesn’t care for a provision that will require employers to provide coverage to employees’ children up to age 26 regardless of whether they have insurance available through their or their spouses’ employers.
“They can be married, they can live out of state, they do not have to be a full-time student,” Dunn said.
The county self-funds health-insurance claims up to $45,000 per person per year, she noted, comparing that to deductibles people pay for car insurance. The county also carries aggregate coverage, “and I liken that to kind of an umbrella policy” that carries a maximum for all claims of $984,686, she said.  
Except for some claims that remained to be processed, the county’s loss ratio stood at 50.44 percent, Dunn said, adding, “a normal, average, good year is an 80-percent loss ratio.”
Also positive was county employees’ acceptance of generic prescription drugs, which stood near 80 percent for this year compared to a high-20s percentage four or five years ago, she said. “That certainly helps this plan’s cost quite a bit.”
Dunn offered results of an analysis that resulted in three options. Staying with the current company would result in saving $44,000 over this year’s cost of $1,107,069, but the other options were pegged at $991,943 and $973,222. The commissioners opted to accept two-tier coverage from American Fidelity at the latter cost.
Dunn had another recommendation.
“There are now fully insured organ-transplant policies,” she explained, “where you carve out the organ transplant and buy a policy that will cover all those charges for you rather than take the risk on a self-funded plan. If we were to incur an organ transplant, I guarantee you that we’d have a large laser the following year.”
The commissioners opted to purchase the transplant coverage.
Under a “laser,” an employer pays for the treatment of someone incurring unusually high bills, with the intent of reducing the overall cost of coverage.
Dunn said most of her customers are adding an organ-transplant policy, which became available about 18 months ago, to their coverage. Pete Franzman of Franzman Insurance agreed.
“Every client I have has added it as we’ve gone along,” he said. “It’s a good thing to do. It’s a lot of protection and costs you hardly anything.”
He also told the commissioners that in 2014, any employee working 30 hours per week will be eligible for benefits and a “look-back” to 2013 will determine who those employees are.
“In other words, in 2014, you can’t go back and say ‘well. we’re going to work them 29 hours a week so they’re not eligible … if you have any employees … that you are not intending to cover under insurance, that change will have to be made before the end of this year so none of it occurs in 2013 because they would be locked in.”
Most of the county’s part-timers work 28 hours per week.
Dunn said she’d provide information about how to determine each employee’s eligibility.