By Marshall Vanderburg, Director of Operations at Joining Vision and Action
With increased public discussion regarding the Affordable Care Act (ACA), one important element easily overlooked is the role employers have in providing health insurance. Conversely, ACA’s effect for employees deciding whether to take advantage of employer-provided health insurance coverage.
Employer-provided health insurance coverage trends break sharply between larger firms of 50 or more employees, and smaller firms. In 2015, 96% of larger firms provided health coverage options for employees, compared with 29.4% provided by smaller firms. ACA does not require larger firms to provide health insurance options, though it does establish penalties if coverage isn’t offered. There are no requirements for smaller firms. Interestingly enough, these percentages have not varied significantly the past 20 years.
Joining Vision and Action (JVA) comes at this from a unique perspective. As JVA grew as a small firm in the mid-1990s, providing health care insurance for employees was a moral imperative of the owner. JVA’s staff nucleus during business startup were primarily women, many with young children. Several had spouses with employer-sponsored insurance coverage; others did not. It was a dilemma then, as it was until the ACA became effective, with the question: “How do I ensure my family and I have continuous health coverage”? If you did not have an employer-sponsored health plan, did not qualify for Medicare (age 65 and older) or Medicaid (low income), you relied on “pay as you go” at local health facilities. Finding insurance coverage outside the existing Medicare/Medicaid/employer parameters was challenging, confusing and restricted due to factors such as cost, availability and coverage limits due to health situations such as preexisting conditions.
A Little History
An early saving grace providing consistency to health coverage was the passage of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and, in Colorado, the passage of Colorado Continuation in 1996 (to fill in the gaps left by COBRA). This allowed employees belonging to an employer-provided insurance program to continue health coverage for 18 months after termination of employment. This typically included carrying forward preexisting conditions. Unless the termination agreement specified otherwise, the employee paid for the ongoing coverage.
In more recent times, JVA has learned from experience the change of landscape for employees making health care coverage decisions since the passage of the ACA. The ACA provides certainty for health coverage (insurers must cover preexisting conditions and dependents until age 26) and also provides a health care insurance marketplace.
Due to this, the ACA provides greater levels of health care availability and certainty. A new employee at a firm providing health care insurance has the choice to retain a previous health plan or choose a new plan. Though retaining or choosing a health care marketplace plan instead of an employer’s plan requires the person to pay full cost for the coverage. People will still make this choice due to the desire to retain their personal health care providers. What occurs more frequently is a leaving employee choosing not to use COBRA/Colorado Continuation since the availability of coverage is easily accessible through the health care marketplace. This is accomplished with certainty of outcome.
The Bottom Line
The decision-making process regarding personal and family health care since ACA passage has become less fraught with anxiety, providing greater flexibility and choice.