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What you should know about national health care reform
By Ed Maguire
While health care reform has been all the buzz in today’s media, it is important to note why employers assume the responsibility of insuring their workers with benefits such as health insurance, dental coverage and other employee benefits in the first place.
To learn more about National Health Care Reform, please visit the National Association of Health Care Underwriters web site.
The history of this country’s practice of employers paying for health care and other benefits is rooted in the wage and price controls that were in effect during World War II. For the first time, Congress, in order to mitigate these wage controls, allowed benefits to be tax deductible to employers and offered a tax-free benefit to employees. Congress’ action and employers’ desire to attract and retain employees in a competitive employment market, led to the system we have today.
Today, medical coverage is the focus of a national debate taking place in the halls of government and the homes of America. The main components of health care reform being debated are:
- An individual mandate for insurance coverage that would require all citizens to purchase coverage either from their employer or individually. There would be a penalty assessed for those who do not have coverage.
- An employer mandate to provide health care coverage for their employees and contribute financially to the health care plans. While many employers pay 50% or greater of the cost of insuring their employees and their employees’ families, many employers with lower paid and part-time employees have traditionally not provided medical coverage. Many of the bills before Congress would require employers to cover their employees or pay significant penalties.
- A government plan to compete with private plans. This provision has received the most publicity because many believe if the government can offer a plan that reimburses providers based on Medicare reimbursement rules, which are significantly below what private carriers reimburse, it will eventually lead to a government only system. Congress is also looking at a system of private purchasing cooperatives similar to the Massachusetts Connector. The Massachusetts Connector is an independent state agency that helps Massachusetts residents find the right health insurance plan and avoid tax penalties.
- The reform of insurance markets would prohibit the use of pre-existing condition limitations, medical underwriting, and other risk selection practices. This would have minimum impact on medical insurance contracts in Massachusetts, since most carriers do not currently engage in these practices.
Over the next few weeks, many of these issues should be resolved. If, and when, a law is passed, Sapers & Wallack will conduct a series of seminars that will explain the new system. At any time, we are happy to update you or answer any questions should you want to discuss your personal or professional health care coverage.
Ed Maguire is the Executive Vice President for Group Benefits Advisory at Sapers & Wallack. With over 25 years of experience at Sapers & Wallack, Ed leads his staff of experienced professionals in providing day-to-day support to the personnel and financial staffs of approximately 300 corporate clients in the area of employee welfare programs. If you are interested in learning more about national health care reform, please email Ed at emaguire@sapers-wallack.com.