Employers weigh health care options

A little over two years before the federal government requires individuals and many employers to carry health insurance, uncertainty reigns over costs, how state insurance exchanges will be implemented and even whether the law will survive political and court challenges, experts said on Thursday.

Most companies still are trying to assess the impact of the pending health care reform regulations, said Geri Recht, a senior consultant with Towers Watson, a benefits consultant in Pittsburgh.

"There is no one answer for any one organization. There is a spectrum of opportunities in between play (providing coverage) and pay (for not offering coverage). They have to study it and analyze it" to determine what is best for their company and employees, said Recht, a speaker at the Pittsburgh Business Group on Health's Health Care Futures symposium at the Pittsburgh City Center Marriott in Uptown.

About 80 percent of the respondents to the Pittsburgh Business Group's membership survey last year said they plan to offer health care benefits in 2014, while the remaining 20 percent are exploring other options, said M. Christine Whipple, executive director of the 75-member business group that advocates for cost-effective health care coverage.

"Nobody said they would drop it," Whipple said of health care coverage.

The event attracted about 300 health care consultants and benefits managers -- more than last year. Whipple believes attendance was greater than last year because it is getting closer to when mandates take effect in 2014.

Costs will be the primary driver for what companies do, and how to manage those costs will be the challenge, said James M. Winkler, managing principal for Aon Hewitt, a benefits consultant in Norwalk, Conn.

Winkler's firm is organizing an insurance exchange that will combine buying power to get the best price for health insurance products.

"I think half of the marketplace could end up in there in five years," Winkler said of the insurance exchanges.

One of those area employers hoping to continue to offer health care is Glade Run Lutheran Services, a 500-employee social services organization in Zelienople, said Tina Lynch, human resources director. The organization is trying to determine how it an offer excellent benefits at affordable costs, she said.

All of these preparations are being made now, even though no one knows if any, or part of it, will remain in place in 2014.

Republican presidential candidates have promised to fight to kill President Obama's health overhaul plan. Many states have filed challenges, including Virginia, which was told by a federal appeal courts yesterday that it cannot rule on the validity of the mandated coverage until 2014 and a state can't challenge mandates imposed on individuals. The battle is expected to continue until it reaches the U.S. Supreme Court.

"You've got that unknown variable out there," said Thomas Henschke, president of SMC Business Council, a Churchill-based organization representing about 1,500 small businesses in the state.

Some companies may opt to offer health insurance just for certain employees. The employer would pay a $3,000 penalty for the uninsured workers, who would buy insurance through the state insurance exchanges, Recht said.

Another way of spreading the costs is to increase the employee's share of the insurance. Many employers that split premium costs on an 80-percent/20-percent basis 30 years ago are scaling back from bearing 90 percent of the costs to 80 percent again, Whipple said.

Companies will have to determine whether the state's insurance exchanges make sense for them, said Roni McDonough, global benefits manager for Electronics for Imaging, a digital technology company with an office in the Strip District. Most companies are self-insured, and that will affect their decision, McDonough said.

"The law itself is not going to lower the costs, but the establishment of the state (insurance) exchanges might," McDonough said.