- Federal Employees Health Benefits option could become an option for Tribes with modest changes, but it is currently a very, very expense option for tribes with large enterprises (especially gaming, hospitality industry) although many aspects of the law would improve health insurance options for their employees:
Analysis of FEHBP (Ed Fox)
- 1. allow restricting coverage to government employees (allow tribes the choice of including enterprises or just government) ---NOW ALLOWED as of NOVEMBER 20, 2014--- see notice.
- 2. allow a lower actuarial value for dependents (lower than required 70% of cost paid by Tribe)
- 3. allow spouse only or dependent only coverage; with FEHB you can only add 'family' and that means spouse and dependent children. More would add spouse, but depend on IHS-paid services for healthy children.
- The eligibility for subsidies in the exchange requires an employee to purchase coverage of qualified employer insurance (including AIANs)
- 1. If coverage includes minimum benefits.
- 2. If coverage is affordable-based on the covered employee's cost, not family/household cost (over 9.5% is not affordable).
- Self-Attestation in first year
- HHS proposes using post-enrollment audits, rather than pre-enrollment verification for this eligibility requirement
- Some individual tribes and tribal organizations have begun to study the impact of Health Care Reform and the ACA on business expenses. It is entirely possible that it will lower costs for health programs, but raise the expenses of tribal enterprises. Deloitte has prepared a summary of the impact on the hospitality industry.
- Typically, health insurance for employees is a function of the Human Resources department, but many community members and some on tribal councils believe the Health Program has this function. It is almost always best that Human Resources work with the Health Program when making decisions on employee health insurance.
CMS database for verification of 'offers of insurance'
- CMS's will develop a database to determine if an individual has a viable offer of employer sponsored insurance to determine eligibilty for exchange plan subsidies.
- If Employer plan is 'affordable (>9.5% of income ) and has adequate benefits you are not eligible for tax credit subsidies.
- Employer Coalitions' Advocacy
- Comments, reports, letters concerning impact to hospitality industry:
- Deloitte review of impact on Hospitality and Leisure industry.
- Nearly All Tribes are LARGE employers and this is a summary of new rules (if enacted in 2015) that will impact your employee health insurance costs.
- 1. Grandfathered self-insured plans -not subject to most of HC reform, however make a change and you lose this status (and most plans will eventually lose grandfather status)---don't count on this protection.
- 2. Waiting period for employer health coverage to begin will be no longer than 90 days in 2014 (Many of us have 6 months).
- 3. Employer mandate is for over 50 FTE (FTE is defined as 30 hours per week)---so, yes, your tribe is probably a large emloyer.
- 4. Employee eligibility for insurance (mandate) is 30 hours a week or more.
- 5. Employees automatically enrolled in health care in 2014---typically this increases enrollment and with mandate is guaranteed to do so.
- 6. If you eliminate health insurance coverage the penalty is $2,000 per employee (after first 30 employees).
Small Employers (2- 50 employees )
- Although most Tribes are large employers, some enterprises or tribal member businesses fall under the small employer, SHOP Exchanges
- Law requires exchanges to allow group payment with the Exchange acting as a premium aggregator.
- AIANs will still have the right to monthly, not annual enrollment, but the cost sharing provsions in the individual exchange does not apply in SHOP.
- Brokers cannot address the health insurance needs of Tribal Enterprises alone and need the help of enterprises, HR, and Health Directors.
- July 2013 comparison of individual and employer mandate impact
- Most Washington Tribes' Enterprises and Government have self-insured health plans for employees and do not fall under most state regulations.
- Self-insured and fully insured plans must comply with the following ACA provisions:
- Dependent coverage for adult children up to age 26;
- Coverage of preventive health services without cost-sharing (grandfathered plans are exempt);
- No rescissions of coverage, except in the case of fraud or intentional misrepresentation of material fact;
- No lifetime limits on essential health benefits and annual limits are restricted until 2014 (in 2014, all annual limits are prohibited); and
- Improved internal claims and appeals process and minimum requirements for external review (grandfathered plans are exempt).
- The Family Glitch (hopefully changed by law or reg in 2014)
- The eligibility for subsidies in the exchange requires an employee to purchase coverage of qualified employer insurance
- A spouse cannot get subsidy in the exchange if dependent coverage is offered (even if it is unaffordable for the spouse).
- Negative impact on Indian employees who seldom add spouse to insurance plans for two reasons (expense and IHS access).
"More than 27,000 Washingtonians are employed by tribal governments and their enterprises." Taylor Policy Group 2011
See report below and excerpt for a description of a strategy to rationalize staffing to promote more full-time jobs & avoid an accidental offer of insurance to 'variable' hours employees.
It is suggested to have more fulltime and more part time, but fewer "variable' between both.
Over 40,000 Washington State AIANs with Employer Insurance are under 400% of FPL
2 million AIANs have employer-sponsored health insurance and 364,000 of those with ESI also have access to IHS services.
Tribes should analyze the options to maximize tax credits only available in federal or state health insurance exchanges for (or some) employees, dependents and uninsured patients.
- For 2 different reasons Tribes may use exchange for both government and enterprises.
- 1. Tribal Government employees typically have good health insurance, but their spouses often do not. Since over 50% of Indian employee families are eligible for cost sharing exemptions (and can buy low cost bronze plans for enrolled tribal members) tax credits are available to lower premium cost.
- Dependents of tribal employees, spouses especially, usually are not added to coverage.
- Using the exchange instead of 'self insurance' means spouses can buy insurance at low cost (due to tax credits) and often with cost sharing exemptions not available in self-insured plans.
Tax credits are not available to spouses or other dependents (although Medicaid may be) if the self-insured tribal health benefits plan 'offers' dependent coverage even if it is not affordable. Dropping dependent coverage needs to be carefully planned for its effect on all employees and some way must be found to offer competitive benefits to all employees.
- 2. Enterprise employees (fewer than 20% are AIANs) in the hospitality industry are most often income-eligible for cost sharing reductions and tax credits-that is most, but not all, have family incomes lower than 400% of the Federal Poverty Level.
Private Insurance is usually employer sponsored insurance (ESI)
- See table on 50 state totals for private insurance for AIANs
- National Indian Health Board tracks health care reform.
- Businesses, Brokers and third party administrators have a role in directing the coverage of 2 million AIANs who have employer sponsored insurance (ESI)
- Especially the 364,000 AIANs who have ESI and access to IHS.
- Brokers could play a larger role in maximizing benefits of special AIAN provisions in employer plans.
- Some Tribes will investigate whether or not they should utilize the exchange for some or all of their employees' health insurance coverage.
- Integrating employer coverage with CHS program for AIANs results in exemption from cost sharing ONLY if insurance is purchased in the Exchange (at any income level).
- It is important to note that not all factors have stabilized with many unfinished or postponed regulations that impact business. In February 2014 medium sized employers were exempted from penalties if employee use the exchange (up to 100 employees).
- Don't make the mistake of thinking your enterprises are like all larger employers who do offer affordable insurance to spouses and dependents.
- A simple test: Are your employees more like Boeing employees or Walmart employees?
- If most are highly skilled and hard to replace; provide insurance without use of exchange.
- It may be in the best interest of both tribe and employees to use the exchange. The greater the percentage of employees who are AIAN the more likely this is true. Likewise the greater the percentage of your employees who are tax credit eligible, the more likely using the exchange is a better option for all employees than to self-insure.
- Employer mandate not necessary for success of ACA and in 'normal times' could be amended or eliminated. 2015-2016 is 'silly season' so hard to predict.
- There is a requirement to cover employee and dependents (to age 26)
- There is no requirement to cover spouse.
Suggested Citation: Health Care Reform for American Indians and Alaska Natives, Ed Fox, 2016 Website.
Free and unlimited use granted with citation (suggested citation above).