Due Diligence Post Affordable Care Act (ACA)

By George Lincoln | Apr 09, 2014

I recently worked with a small company who was able to cut their health insurance costs substantially by moving to an ACA compliant health plan. That may sound strange to hear as I know the majority of small businesses have seen rates go up in 2014 versus down, but in this case, the opposite happened.

 

This happened to be a very small group with just three employees enrolled in their group health plan. There are many factors associated with the ACA that affect plans and rates, one is the elimination of what we call a “group size factor”. This is essentially a load on premiums for smaller companies to account for the fact that administrative costs are higher for small groups where there are fewer people enrolled to spread the insurance companies fixed costs associated with managing a health plan. This change eliminating group size as something an insurance company can charge for benefits very small groups.

 

There are many changes in the health insurance market and while some changes are apparent others are more obscure. Following are a few examples that could have varying impacts on different companies based on your demographics and current health plan:

- Age rating factors for small companies generally used 5-year bands, now they are based on each yearly age

- Individual and small group plans must meet certain actuarial values

- Individual and small group plans must cover minimum essential benefits as defined by the ACA

 

The reality is that you cannot assume that the ACA impact on your neighbor will mirror the impact for you. Especially in the group health insurance market, each company is different and each should analyze the impact independently.

 

The company I described at the start of this article was advised to renew their 2013 health plan in December because most business were benefiting from doing so. Had they done that, they would have overpaid substantially in 2014. They could have saved even more by analyzing their options at the start of 2014 and making a change then.

The moral of this story is that it is more important than ever to do your due diligence. You could argue that was always the case with health insurance, but the ACA makes it even more so.

Comments (17)
Posted by: Ben Ellison | Apr 22, 2014 12:13

It was a pretty easy mistake to make, Whitney, because it's very unlikely that inexpensive New Hampshire health insurance would have covered Harold's daughter. That's one reason it was inexpensive.



Posted by: Catherine Cooper | Apr 21, 2014 22:59

WOW! Ben, as Obama proudly called the Affordable Care Act, Obamacare, I,too, will embrace and now take claim to "Catherine-style' Conservative values!  Thank you! You made my day!



Posted by: Whitney Aitken | Apr 21, 2014 20:56

Sorry Ben, by over the border I meant in New Hampshire. Of course that was  before ACA kicked in.



Posted by: Ben Ellison | Apr 21, 2014 20:17

I disagree wholeheartedly with Catherine Cooper. It's wonderful that Harold's daughter now has health insurance, even if it would have been just a normal fact of life in about 30 (possibly more mature) nations around the world.

 

It's also virtually insane to call Harold a racist simply because he noted that the extreme (Catherine-style) opposition to ACA might have something to do with the fact that Obama is perceived as our first black president.  It's an obvious fact, proven by polls and statistics.

 

I do agree with Whitney that our country's health care system could be even better than ACA,  but it was impossible to create a Medicare-style single payer system with the nutty Catherine-style opposition. I am 67 years old, by the way, and am very pleased about my Medicare health benefits.

 

I also happen to have a lot of doctors in my extended family and all agree that health care just doesn't fit well with Catherine-style "free market" competition. I for one would be happy to have the government manage all health care insurance, as is being done without problems in many countries.



Posted by: Ben Ellison | Apr 21, 2014 20:17

I disagree wholeheartedly with Catherine Cooper. It's wonderful that Harold's daughter now has health insurance, even if it would have been just a normal fact of life in about 30 (possibly more mature) nations around the world.

 

It's also virtually insane to call Harold a racist simply because he noted that the extreme (Catherine-style) opposition to ACA might have something to do with the fact that Obama is perceived as our first black president.  It's an obvious fact, proven by polls and statistics.

 

I do agree with Whitney that our country's health care system could be even better than ACA,  but it was impossible to create a Medicare-style single payer system with the nutty Catherine-style opposition. I am 67 years old, by the way, and am very pleased about my Medicare health benefits.

 

I also happen to have a lot of doctors in my extended family and all agree that health care just doesn't fit well with Catherine-style "free market" competition. I for one would be happy to have the government manage all health care insurance, as is being done without problems in many countries.



Posted by: Debora Riley | Apr 21, 2014 15:39

I agree wholeheartedly with Catherine Cooper. Harold, I can understand your concern over your adult daughter having health insurance. That being said, it is an outrage to have working class Americans responsible not only for their own health insurance costs, but for those of everyone else. We live in a society where far too many people feel entitled to a living on the backs of the working class. Those who are truly disabled I understand their needs and this isn't about them. Those who "merely play at" being disabled, Shame on you, get up and go to work, support yourselves!



Posted by: Whitney Aitken | Apr 14, 2014 12:27

I am very happy your daughter finally has health insurance Harold, but don't give credit to where it isn't due.  She could have had very inexpensive health insurance all of this time had she lived over the border.  Obama may be dictating that we all must have insurance now (unless of course he changes his mind again) but he hasn't made in affordable to say the least.  What he has done is lined the pockets of insurance companies.  When the insurance companies realize the loss of profits, because of Obama's recent "rescinding" of the individual market mandate (especially those healthy young adults who won't use care for many many years but were being required to purchase outlandish policies and were to finance this entire sham) I can guarantee any good deals some are getting now will be for a very short period.  Good luck though! 



Posted by: Susan P Reitman | Apr 11, 2014 21:41

What I am really angry about is that the majority of American's voted for OBAMA because they did use critical thinking skills to research what he is really about [SOCIALISM AND WORSE].  Granted the majority of politicians are worse than spoiled brat children fighting among themselves with no regard for the citizens of this country.  There is no difference between Democrats and Republicans because once they get to Washington money and power corrupts.  I am 72 years old and have lived through 2 horrible presidents before OBAMA, Carter and Nixon and I believe that OBAMA is much worse and more dangerous.  I am positive History will support my opinion of OBAMA but unfortunately I will not be alive to see it.



Posted by: Francis Mazzeo, Jr. | Apr 11, 2014 18:41

Harold....you've stood by your child all these years and are finally getting insurance. Hopefully you don't take to heart all the ranting about Obama. Anyone that thinks one person is responsible for the mess this country is in is sadly mistaken. There is so much greed and corruption in our political parties that we will never see it get better. Catherine Copper wants the liberals out of her pockets but I guess Corporate America dipping in is okay. Susan Reitman has to yell at us to get her point crossed. Wonder what she is really mad about?



Posted by: Harold Richardson | Apr 11, 2014 12:18

My adult daughter has a serious debilitating disease and for the first time in her life she is able to buy health insurance and have a regular doctor.  President Obama is responsible for that.  I wish he had done a better job in just about every other area but I have to give him credit for what he has accomplished.



Posted by: Catherine Cooper | Apr 11, 2014 11:31

It must be NICE to have a ready made excuse at your disposal for every bad policy, weak position, and anti American move you make! Just pull out the race card! And Obama is biracial anyway, he isn't fully Black and he isn't fully White! Obama is weak, ineffective and wants us to to become the 3rd world nation his family is from! He was raised with a Socialist mother when his biological father abandoned him so his views lean ever so left bordering Socialism! And Harold, the media tore President Bush apart with glee, no apologies made!



Posted by: Harold Richardson | Apr 11, 2014 09:00

Spare me the faux or should i say fox outrage Susan.  The racism in this country and State is well documented and history will judge how this President and his family were treated by so many in this country.  The birth certificate stuff, his religion, the disrespect from other elected officials from day one.  I actually don't think he's been a very good President and history will also judge him for that but to ignore the overt racism in this country that still exists is a big part of the problem.



Posted by: Susan P Reitman | Apr 11, 2014 08:36

Mr. R  I am DISGUSTED  to read that you brought OBAMA'S RACE into  your post here.  I do not know what your color is but I have noticed lately that the race baiting is always brought up by a black person.  WHO GIVES A DARN WHAT RACE OBAMA IS!!!!!  It makes me sick to my stomach that OBAMA and his administration are the one's always talking about OBAMA'S blackness and they do so to manipulate the American people from taking OBAMA to task for his shoddy presidency for fear of being called a RACIST.  I WILL SAY IT OBAMA IS THE WORST PRESIDENT THIS NATION HAS SEEN AND IT HAS NOTHING TO DO WITH HIS COLOR!!!!!! GIVE IT A REST PLEASE.



Posted by: Harold Richardson | Apr 11, 2014 07:55

"The idea of an individual mandate replacing the single-payer health care system was proposed in 1989 by the conservative Heritage Foundation and was published in a paper titled, “A National Health System for America.”

So this plan started from one of the most conservative republican groups in the country not the democrats-

The issue as I see it Catherine is that no one in this country is turned down when they go to an emergency room and any visit to one you will see the majority of people there getting treatment because they don't have any insurance-we all pay for that now.  I see the ACA as no different than Medicare.  Some use it a lot and some luckily go thru life with little illness.  Those of us that are lucky should have some responsibility for those less fortunate.  I think that one reason it is a mess to start is because there is so much hatred in this country for this black President that they would use any means including hurting the American people to make him fail.  Someday these initial problems will get worked out and we will be as happy with this program as we are with Social Security, Medicare etc.  Best wishes and good health to you, Harold Richardson



Posted by: Catherine Cooper | Apr 10, 2014 22:29

Good for your daughter Harold and no disrespect to you but who is footing the subsidy for your daughter's insurance? Obama? You? Maybe you but most likely me and you and many other working Americans. The heavy handed presentation of the forced insurance is different than car insurance since I can say no to owning a car so i can forgo and therefore not be forced to have insurance. But me be alive annd told I have to buy insurance with huge deductibles AND be forced to pay for others insurance is a bitter pill to swallow. I will do all I can to elect a Republican into the Whitehouse in 2016 and in the 2014 midterms I will vote Republican so I can hold on to more of what is my money.

 



Posted by: Harold Richardson | Apr 10, 2014 17:26

I have an adult daughter born with muscular dystrophy.  She had not been able to buy health insurance at any price before the affordable care act and by the way, she is a hard working American.  Obamacare has allowed her to buy affordable health insurance for the first time in her life.  It is not just health coverage but piece of mind and self esteem as well.  All people should have access to regular health care and save the emergency room visits for the true emergencies.  Harold Richardson.



Posted by: Catherine Cooper | Apr 10, 2014 16:43

You mean Obamacare? Remember how proud he was to call the forced upon us insurance Obamacare? If I chose to be covered I could but I won't. Not at a rate quoted to me of $375 per month with a $6000 deductible. A $6000 deductible means that BEFORE any benefit is derived from the policy, I PAY the first $6000! I spent $565 on doctor visits last year. The subsidies some are receiving aren't a FREEBIE from the government. Hard working Americans are paying those subsidies. And the taxes associated with Obamacare aren't even in effect yet. Not until after the midterm elections so the low information voters will continue to vote for the liberals who put these policies into law. Enough is enough, working America says get your hand out of my pocket!

 



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