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Obamacare impact on big business premiums?

 
 
Reply Fri 6 Dec, 2013 10:55 am


Hi
I am trying to understand the effect of Obamacare on big retailers like Walmart
I understand that for individuals, premiums will be increasing because of policies getting better as well as existing conditions being included. But for many subsidies may offset some or all of the increase.

For big businesses, do they just see the increase in premium, but without the subsidies?

I presume that where employees contribute, they will pass on this cost up until the c9% maximum, but will they have to pay the remainder of the increase.

So am I right in saying that there will be a significant increase in the cost of providing healthcare for big businesses?

Thanks
Tom
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Type: Question • Score: 1 • Views: 1,163 • Replies: 2
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InsuranceLady
 
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Reply Wed 9 Apr, 2014 10:12 am
@thomaspassmore,
That is an excellent question and I wish I had some hard answer for you. Insurance premiums are always rising, but with the ACA the costs to consumers is limited by income. Big businesses do not get subsidies or financial help providing insurance, the idea that their buying in bulk power is enough of a benefit. The 9% of the employees AGI is the maximum, but that could be lower depending on where the consumer falls on the federal poverty line. Having worked at Wal-Mart before, I can tell you that the company is going to have to pay down the premium below 9% to be compliant with the law. Where will that money come from? I highly doubt that the big wigs are just going to eat it. I have only a beginning education in economics, but when the price of running a business goes up, it is my understanding that the price of the product goes up. I wish I still knew someone working there and could be more insight as to what is going on there.
Bruce Monteith
 
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Reply Sat 26 Jul, 2014 02:28 pm
@InsuranceLady,
Yes, the expense to a company like Wal-Mart is staggering. The hardest hit companies for additional expense b/c of ACA are the 15 industries that use minimum to low wage labor to deliver their product or service. First in many of these firms the employees were never eligible for the insurance before ACA ( Fast Food, Janitorial, Security Guard, Landscaping, Retail, Home Health Care Etc.) To look at the economics of the situation say a janitorial contractor has 1,000 janitors that previously were not qualified for insurance. An average single POS plan in the US is $389.00 per month. The most you can charge a janitor is 9.5% of lets say 8.00 / hour for 130 hours a month ( ACA Safe harbor ) or $98.80 per month leaving the company to pay 290.20 for each janitor that chooses to but the insurance. Even at 8.00 an hour wage 25% of the newly eligible janitors will but the insurance so 290.20 * 250 = $72,550 per month or$870,600 a year of new expense to the janitorial firm. This is a huge problem b/c a company with 1,000 janitors doesn't make $870,600 profit a year ( I am in the business, I know that ). There is one company that we found that figured out a solution, it is called Speyer Meridian. Somehow they found a way to write a "gold" plan for minimum to low wage employees at 9.5% of the state minimum wage and they charge the employer an administration fee only. We though it was BS and impossible but we fully investigated it and put it in for our janitors and it is legit. CIGNA is the claims payer and it is exactly as it was represented. I am the HR manager of the company and don't have all of the details but somehow the company came up with a privatized Medicare system that works. Our lawyers checked it out - it met all qualifications of ACA and our company is now compliant and our janitors love the insurance product. If you are interested I'm sure you can find them on the web. Hope this helps - this issue drove me nuts for 2 years.
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