In a talk intended to educate an employer audience about public health insurance exchanges, employee benefits attorney Jeffrey Endick pointed to pros and cons in the Affordable Care Act that established the entities. Endick, principal at Washington-based Slevin & Hart, P.C., opened his address to the International Foundation of Employee Benefit Plans legislative conference by saying, “[Exchanges] really are your competition, there’s no other way to put it.”

His overarching messages to the audience were to think of exchanges as an “alternative to the employer-based system,” remember the “enormous complexity” of the exchanges and think about the extreme amount of money that is and will continue to “flood” into the exchanges.

Endick had several other specific observations that employers should think about when it comes to exchanges:

  • A state’s Medicaid expansion plan could impact employees. There are 20 states that have said they will not expand Medicaid. Two states, Kansas and South Dakota, have governors who have not yet declared their stance. “Those states that don’t expand Medicaid in the way that the ACA allows them to could result in more people being uninsured … if [employers] export people over to the exchanges, it could leave them with no way to purchase coverage,” Endick says.
  • All metal levels are not created equal. The states don’t have to offer a 90/10 plan, meaning 90% of the claim is covered, leaving 10% to the individual. “But there’s been a lot of push back by the health insurance industry. People who want 90/10 plans tend to be older and sicker so insurance companies are more hesitant about them,” Endick says. 
  • Prepare for discrepancies. If employers send employees to the exchanges, they need to be prepared for employees who live in different states. If one person who works out of state walks into an HR director’s office, they could have a completely different grievance than someone who works in another state.
  • The affordability test. When an employer offers what is now required under ACA as affordable coverage to its employees, it must only be affordable for employees. Endick says the “huge wrinkle” in this is that while the employer must also offer dependents coverage, the law doesn’t stipulate this has to be affordable. If the dependent then decides to go to the exchange they will not qualify for exchange coverage because they’ve been offered it, even though it’s not affordable.
  • The exchanges are really gatekeepers to determine eligibility for Medicare, Medicaid, or premium assistance tax credit. Endick says in the end you could have family members sent to different places for coverage because of this.
  • Think about timing. According to Endick, the timeline for issuers to sign agreements with the Centers for Medicare and Medicaid Services isn’t until Sept. 5 – 9. That’s about three weeks from open enrollment.

Despite the flags he raised on Tuesday with the IFEBP audience, Endick remained optimistic: “It’s amazing to me how much the participants and employees will understand about the program and exchanges if you spend some time working with them on that.”

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