Uncertainty Is Certain in 2018 Healthcare

Wow, this has been an exciting week – the health care bills / withdrawals / repeals abound, but no resolution is in sight.

We do know that repealing the Affordable Care Act (ACA) will leave millions more without health coverage than under the current regulations – the CBO put the number at 32 million by 2026 (but, we’ll also lower the deficit by $473 billion).

While that does not seem to have support from the Senate, the uncertainty of the health care regulations is creating a lot of turmoil for insurance companies. How can you plan for the future, when the future of the health care rules might change?

NPR and Kaiser Health News (KHN) set out to see how much this uncertainty is costing consumers. If you were not aware, the insurance premiums were due to the respective state insurance boards in June. Many companies have been asked to revisit their rates and make adjustments, but what does all of this uncertainty do to the pricing?

A lot depends on the Federal subsidies in the marketplaces. If the current administration stops these subsidies in an effort to “gut Obamacare markets,” it will eliminate the “affordable” out of the Affordable Care Act for millions of Americans and many (especially healthier) people will be forced to drop their coverage due to the sharp premium increases.

It ends up, this uncertainty may cost consumers a lot next year. Per the NPR / KHN report, “In Pennsylvania, premiums next year without the subsidies would increase by an average of 20 percent, compared with 9 percent if they remain intact.”

The Pennsylvania Insurance Department further states that “Statewide average rate increases will be 36.3 percent if the individual mandate penalty is eliminated and cost-sharing reduction funding is also cut off.”

Average premiums in Pennsylvania in 2017 (without subsidies) are $533/month. That means, 2018 may have the following average premiums for those in Pennsylvania:

ACA Chart 2018

That’s just one state’s projections, and keep in mind that these are average statistics in Pennsylvania. Some will experience less and some more that what is noted above.

I am not sure who could lose their up to 64% subsidy (average of $340/month or $4,080/year in 2017) and then potentially shoulder an additional $2,300+ premium increase next year due to policy changes. That could be about $6,400 in additional premiums next year alone.

It does look like there may not be a full understanding of what health care premiums are from our current leader. I think $12-a-year premiums sound great, but even those of us with employer subsidized coverage don’t have that kind of deal.

Whatever the future holds, I hope we do not take coverage away from millions, either through mandate or affordability. Many employers are also struggling with affordability issues, and certainly do not receive any Federal assistance.

I do agree that all sides need to come together and come up with something to help fix the situation we are now in. There will be winners and losers in this process, but keeping the uninsured as the ongoing loser hardly seems fair.

However, this uncertainty may kill us before we ever get there…

Do you work in manufacturing? It might be time to revisit your HR policies…

I heard this report on the way to the airport this morning and this it deserves a mention: the women are coming to fill vacant manufacturing jobs! Maybe even the oil and gas fields?

So, what has traditionally been a male-dominated employer space may shift a bit toward attracting the female population.

What does this mean for you? Well, lots of things, but I focus on HR issues, so we’ll stick to that aspect of the implications.

Benefits

Make sure your policies are up-to-date and as female-friendly as possible. Do you have PTO or sick/vacation plans (young/healthy prefer PTO but once kids or illness is in the picture, employees prefer separate sick/vacation policies)? How about your maternity policies and coverage? How do you compare to your competitors on this front. It is a war for talent out there!

Training

Unfortunately, this also means that you probably need to beef up your sexual harassment policies and training. I’ve been in plants before, and women tend to put up with a lot of off-color remarks. However, I am also a bit older and used to living in that environment – younger women may not be so tolerant. Get ahead of any issues on this front.

What should happen if a field or plant worker becomes pregnant? What will you do with her job – keep her on it or move her to a desk role? What are the risks/implications of each? Please don;t consider termination! That will not end well

Other

Do you have a locker area for women? Lactation rooms close to your work sites? Is your safety gear available in female sizes?

You can see how this relatively modest shift can quickly change the dynamics of your work environment, and it is probably long overdue. Wasn’t Rosie the Riveter over 70 years ago?

rosie

Will your older employees EVER retire?

According to a new Career Builder survey conducted by Harris Poll, they don’t plan to do so any time soon. One of the main reasons, according to the survey team, is financial uncertainty.

According to the survey results, “one third of workers ages 60+ (34 percent) say they aren’t sure how much they’ll need to save in order to retire.” These are employees typically within 5 year of retirement, and they don’t even know if they are near or far from being able to do so. That’s a problem not only for your employees, but also for employers who now have a large chunk of older workers who are probably ready to go, but not financially able to do so. Your employee engagement and productivity may be headed downhill.

The survey found that “when asked if they’re currently contributing to retirement accounts, more than 1 in 4 (26 percent) workers 55+1 said they do not participate in a 401(k), IRA or other retirement plan.” My guess is that if the employee is not participating, then neither is the employer; meaning, these people probably have little to no savings for retirement.

What’s worse, based on the survey results, “30 percent of U.S. workers ages 60 and older plan to retire at age 70 or older. Another 20 percent don’t believe they will ever be able to retire.” That’s 50% of workers age 60+ who plan to stick around for an additional ten years or longer!

What if those employees have health issues and/or are not fully engaged? What if they become disabled and cannot work, or insist on trying to work while not at 100%?

This seems like a looming HR crisis. How can we educate employees to save? The “head-in-the-sand” approach that seems to be prevalent with older employees is a huge disservice to themselves (and you).

Consider looking at your contribution data and specifically check on your age 50+ population. Are they currently saving? Are their savings on-track? What resources do you have to help educate them about what they need to do today to retire when they are ready?

Please take the time and effort to address this issue before it becomes a crisis for your HR department (and your employees!). They will thank you for it!

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1 CareerBuilder commissioned study of 3,411 employees ages 18 and over (employed full-time, not self-employed, non-government) between November 16 and December 6, 2016, of which 971 are ages 55+.