The Biden Administration and Employee Health Benefits
By Joel Lee
Every new Presidential Administration will usher in a host of changes. Moving from President Trump to President Biden may represent the broadest philosophical shift in decades reflecting sweeping differences in social policy, immigration, taxes and the role of government. Change is in the air everywhere. How might the evolving politics in Washington be felt in how health benefits are offered to employees? And what might employer sponsored benefit plans look like in the next few years?
During the campaign President made it clear that he will look for ways to build on the success of the Affordable Care Act. Let’s take a look at Biden’s broadest ambitions for American healthcare and look at how that might influence or change employer sponsored health plans.
Reduce the Eligibility Age for Medicare:
During the campaign the President proposed reducing the eligibility age for Medicare from 65 to 60. Analysts estimate that about 13.9 million people would leave employer sponsored plans and enroll in Medicare. That is just under 10% of those covered by employer health plans. Since older workers tend to be more expensive, the savings to employer sponsored plans could be as high as 15% annually.
To capitalize on that opportunity, self-insured and even fully insured employers will look for ways to help their employees make the transition smoothly and confidently. “We know from experience that employees are reluctant to leave employer sponsored health plans even when it will save them money, said Frank Cardenas, CEO of FEDlogic. We work with employees to sort through their options, understand Medicare, help in the filing of the benefits, educate them on supplemental insurance, and help plan for coverage of their dependents. Then we give them the information and empower them to decide.”
Offer a Public Option as Part of Insurance Exchanges:
When the Obama Administration formulated plans for insurance exchanges under the ACA, it envisioned offering a governmentally sponsored insurance plan that came to be known as a public option that could supplement the plans offered by private insurers. That provision did not survive but President Biden is expected to revive it. Combined with a recent provision that allows employers to provide pre-tax lump sum payments to employees, the public option might be available much more broadly and include workers from various employers. Even as of recently, the Biden Administration re-opened Affordable Care Act’s insurance marketplaces for additional three months (Feb. 15 to May 15) for those affected by the pandemic.
Expand Medicaid:
Fourteen states have yet to expand Medicaid eligibility to the working poor. On the campaign trail, President Biden talked about offering a premium-free public option through the insurance exchanges for individuals eligible for Medicaid expansion benefits but living in states who have chosen not to expand. A premium-free public option would, on its face have only indirect effect on employer sponsored plans. But if the premium-free option was made available, many low wage workers paying monthly premiums for their employer sponsored plan would realize significant savings and drop their employer coverage in favor of the public option. Imagine a couple working in low wage jobs who pay a monthly premium for family coverage of $500. Their combined wages may well be within guidelines for a premium-free option on the insurance exchange. “Helping those workers understand these options and the benefit they could realize by dropping their employer plan and enrolling in the public option, would benefit the employee and help the employer reduce their cost of health coverage. Ultimately our job is to provide the education and advocacy and let the family decide, but the majority of the time it’s a win-win”, said Frank Cardenas.
For more information visit www.fedlogicgroup.com or contact Anita Blackmer, Chief Business Development Officer, at 615-948-3648 or by email at [email protected].
