Lou Basso of Alcott HR Group was recently interviewed for a Newsday Article published on December 29th, 2011. Read what he has to say the about Empire BlueCross BlueShield’s cutbacks in coverage and how this will affect small companies in New York. You can view the original article on Newsday.com by clicking: Small Business
Small businesses on Long Island, already struggling with high health insurance costs, are dreading Empire BlueCross BlueShield’s looming cutbacks in coverage.
The changes will mean hard decisions for many employers, who may have to limit coverage or offer high-deductible plans. Companies will need to take a hard look at employee needs if they’re going to try to manage costs, with the likelihood of even more of the burden being shifted to employees, say experts.
“Gone are the days of rich health plans with very little out-of-pocket for the policy holders,” says Lou Basso of Alcott HR Group, a Farmingdale organization that provides human resources services to businesses, including managing their health plans. “The options in New York State will now be significantly less based on the Blue’s decision to eliminate these plans.”
Empire has announced it is eliminating about seven of its 13 small-group plans. It has since added two small-business products back, says spokeswoman Sally Kweskin. Empire also has said it will discontinue the products on their renewal dates, rather than the originally announced April 1.
Still, many of those products being eliminated were “pretty competitive,” says Basso, noting there’s no magical solution to lower costs.
For starters, some companies may have to choose a high-deductible health plan, which carries greater upfront out-of-pocket costs for employees than a traditional managed care plan but could be 5-10 percent less in annual premiums depending upon the deductible, he notes.
Bill Tobia, owner of Home Medical Equipment in Garden City, says he will have to consider a high-deductible plan once he can no longer stay within his Empire plan.
“My company is under 50 employees, so I don’t have a lot of options,” says Tobia, noting each year he sees double-digit premium increases and has had to pass on more costs to employees. The company, which has renewed with Empire’s Prism EPO for now at a 16 percent average increase in premiums, pays about $163,000 annually in health insurance costs, he says. He’s not sure how long he’ll be allowed to remain in the Empire plan.
“People who are generally healthy might find the transition to a high-deductible plan effective,” says Paul Essner, a certified financial planner and a partner at The Signature Group of Companies, a Garden City insurance, employee benefits and financial services firm with 100 clients impacted by Empire’s decision, including Tobia’s company. Signature is working with clients to help them make plans, says Essner.
Employers can help offset increased upfront costs to workers by creating an employer-funded health reimbursement arrangement (HRA), he says. These are often paired with high-deductible plans and offer employers a tax-advantaged savings vehicle to help fund employees’ unreimbursed medical expenses, says Essner.
Other options include joining a private health insurance exchange, which offers multiple plan and provider choices to members and allows employees to choose the plans that best suit their needs, rather than have the employer select one plan for everyone, says Vince Ashton, chief executive of HealthPass New York, a not-for-profit commercial exchange.
“We work with insurance carriers to pick the best plans with the best value,” adds Paula Calame, interim executive director of the LIA Health Alliance in Melville, a private exchange, noting they offer plans including Emblem that are competitive with the Empire plans being phased out.
If you can’t afford to offer health insurance, there are options like Healthy NY, a reduced-cost health insurance program sponsored by New York State (see dfs.ny.gov), and Transparent Health Network (transparenthealth.com), which provides access to a network of doctors who have agreed to offer services at a lower, contracted rate if paid at the time of service.
And some employers could qualify for a federal tax credit for providing health coverage to employees (see irs. gov/newsroom/article/0,,id= 220839,00.html).