US Politics Mega-thread - Page 505

A handful of big-name firms and many small ones are making major changes to their health care plans this fall, and while some big companies are blaming the Affordable Care Act, insurance and economic experts call those claims an exaggeration.

Making health insurance changes, including big premium and deductible hikes when the rate of increase in health care costs has slowed, creates a "messaging issue," says University of Michigan business economics professor Thomas Buchmueller.

"That's not an easy conversation," says Buchmueller. "It's convenient to say, 'the ACA is raising our costs.'"

Big companies citing the ACA are "using this as cover," says Farzan Bharucha, a health care strategist for consulting firm Kurt Salmon. "Companies are making a business decision that by dropping or limiting coverage you won't have employees leave."

Still, there has been big news from some big companies — and even a major university — and some cite the new law.

Among them:

• Darden Restaurants. The owner of Red Lobster, Olive Garden and LongHorn Steakhouse, decided last fall to hire fewer full-time workers and more part-time workers to lessen expected costs of insuring full-time workers under the ACA. But it reversed the policy in December after complaints. The company recently decided to give employees a designated sum of money to use to choose their own insurer and plan level through a private online exchange that is separate from the new government exchanges. Darden says the move is unrelated to the health law. Private exchanges are an increasingly popular way for employers to reduce their health costs without cutting coverage for employees, who would be considered insured for the purposes of the ACA.

• Home Depot. The retailer said last month that full-time employees' insurance plans will cost more this fall because its insurance prices had risen. Spokesman Stephen Holmes wouldn't comment on whether that was due to the ACA: "We don't discuss our cost structure, so I'm not going to point specifically to any one thing." The home-improvement chain also said in September that it's sending about 20,000 part-time employees who had low-cost/low-benefit "mini-med" plans prohibited under ACA to the new federal and state marketplaces to buy their own insurance. Holmes wouldn't disclose whether workers will get a subsidy to pay for their new insurance, but these plans are nearly always paid fully by employees.

• Securitas. The large security-guard provider Securitas said last week that it's sending 55,000 employees to the new state exchanges to buy their own insurance plans. The move was in response to the prohibition of "mini-med" insurance plans that the company previously provided. Spokesman Jim McNulty says the company didn't contribute to the plans and will not be giving workers money to buy on the exchanges. He expects most of the workers on the plans — 90% of whom are full time — will qualify for government subsidies.

• Sears. The retailer decided to give employees a set amount of money to choose their own health care insurer and benefits through an online private exchange run by Aon. "The Affordable Care Act motivated us to think differently about the health care benefits that we provide associates," says spokesman Howard Riefs. But, he noted, "The final decision to proceed with a private exchange model was made independent of Affordable Care Act considerations."

• UPS. The delivery company dropped health insurance for about 15,000 of its employees' spouses whose employers also offered insurance. In a memo to workers, the company said it expects to incur about a 12% rise in costs next year due to the Affordable Care Act — specifically the need to cover dependent children longer and the expected rise in the number of employees enrolling in plans. The University of Virginia also dropped this type of spousal coverage and blamed the health law last month.

"There's nothing in the ACA that would make dropping spousal coverage be an obvious response," says Buchmueller. "That's the type of strategy firms have been doing for a while."