by Ben Geyerhahn
Employers face some tough health insurance choices in 2014 and 2015, but there is an easy way to mitigate their insurance costs with generous Medicaid offerings. The Affordable Care Act mandates that employers with more than 100 workers offer health insurance to all employees, and requires that those with more than 200 auto-enroll their employees into health insurance. Like employers, employees are mandated to have insurance or face a fine, so many will enroll in any company policy that’s available. This is guaranteed to squeeze already narrow profit margins.
How are employers dealing with this cost? Some are throwing up their hands and daring the government to fine them $2,000 per employee for failing to offer insurance. The fine is based on the total number of people employed. Unfortunately, this will also lead to an IRS audit. Other employers have chosen to offer a minimum essential coverage plan, which is inexpensive because it covers the bare essentials and protects the company from being fined for not offering coverage. However, each employee who purchases health insurance in a state exchange to make-up for not having coverage through the employer plan triggers a $3,000 fine for the company. Some employers are offering a bare-bones ACA compliant plan for a few hundred dollars per month per employee, while hoping for low participation rates.
The one underutilized strategy is Medicaid migration, which is available only in states that have accepted Medicaid expansion. For example, Medicaid expansion is a boon to restaurants because it increases the salary levels at which families qualify for Medicaid. That translates to millions of workers with higher concentrations in several major industries including restaurants, construction, building maintenance and home health care, among others. What many people don’t know is that an individual who is enrolled in Medicaid can simply decline insurance offered by the employer, saving them thousands of dollars per employee.
The tricky issue is identifying and enrolling employees in Medicaid. Although expansion states have made Medicaid a viable cost saving measure, Medicaid enrollment is difficult because it requires adherence to a raft of regulations. Using a professional enroller who works exclusively in the workplace setting is critical. Brokers have begun including this service in their offering because it is essential to their clients and comes with a commission.
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Ben Geyerhahn is the CEO of BeneStream, a company that handles the screening and enrollment of qualifying employees in Medicaid, and is a member of New York Governor Cuomo’s Health Benefit Exchange Regional Advisory Committee.