MSI Benefits Representative Matt Bidwell told the Pickens County Board of Commissioners today to expect three major taxes in the next year and a half, a result of the Patient Protection and Affordable Care Act (Obamacare).
In his presentation this morning during the board’s work session, Bidwell explained that new healthcare taxes would deeply affect the county’s health insurance plans, as the county prepares to renew its policy in July.
Bidwell explained the three taxes as follows:
The first tax is called the Patient Center Outcome Research Institute Tax. Bidwell said the purpose of the tax is to fund the research of the effectiveness, risk, and benefits of medical treatment. The tax is $1 per member and is due for any policy renewal after September 2012. According to Bidwell, the cost of the tax to the county in the first year would be $426. The tax, he said, would go up to $2 the second year and increase incrementally in subsequent years.
The second tax is called a Health Insurance Fee. The purpose of this fee is to assist in funding subsidies for individuals buying insurance in a fully insured group. The tax will cost approximately two to three percent of the premium. Bidwell said that based on the county’s January invoice, using 2.5 percent, the annual cost would be approximately $62,000. However, since the tax begins in January 2014 and the county’s renewal period begins in July, the cost for 2013 will be approximately $31,000. Bidwell commented, though, that this tax would force local governments to move to a self-insured system.
The third tax is called the Transitional Re-insurance Contribution Tax. The purpose of this tax is to offset high risk individuals who buy insurance in the individual market. Bidwell explained that the fee is estimated at $75 per member per year. The tax is approximately a $32,000 per year liability for Pickens County, Bidwell said, adding that half of the tax will be embedded in the cost this year and half next year.
In his presentation, in addition to the new taxes, Bidwell gave the board more gloomy news about the healthcare law. Mandated by Obamacare, the county must offer affordable healthcare for each employee. During the presentation, Commission Chair Robert Jones asked for the definition of affordable in this context. Bidwell explained in this sense affordable means a plan where the county covers 60 percent of the insurance cost. Additionally, according to the law, the county cannot require employees to pay more than nine percent of an employee’s income for insurance.
Further, the county may be forced to redefine seasonal workers. Bidwell said any employee employed for 120 days or more must also be offered insurance. As such, seasonal workers will no longer be defined as seasonal. Also, employees who work 30 hours or more will be considered fulltime. The federal government will also offer subsidies to employees who cannot afford healthcare. However, these subsidies are only available through insurance exchanges.
In November, Governor Nathan Deal announced Georgia will not set up an insurance exchange. Prior to Deal’s announcement, several other states made similar announcements. Notably, these states are lead by Republican governors and serve a larger strategy. The strategy is a way to defeat the law, or at least a portion of it. According to the strategy, by requiring the federal government to set up these exchanges, the fed will balk because it will not be able to afford the exchanges. However, according to Bidwell, the federal government is expected to set up the Georgia exchange by October. He also said the subsidies are not available to employees where employers offer an “affordable plan.” In the November press release, Governor Deal was resilient.
“We have no interest in spending our tax dollars on an exchange that is state-based in name only,”
“I would support a free market-based approach that could serve as a useful tool for Georgia’s small businesses, but federal guidelines forbid that. Instead, restrictions on what the exchanges can and can’t offer render meaningless the suggestion that Georgia could tailor an exchange that best fits the unique needs of its population. I have joined numerous other governors seeking guidance from the federal government on establishing exchanges. We’ve yet to receive serious answers to our questions. I will not commit Georgia taxpayers to a project with so many unknowns.”
During this morning’s works session, Capstone Benefits Advisor Barry Murphy also delivered a presentation, on behalf of Allstate. Although more optimistic, Murphy’s presentation was more vague. Addressing the board, Murphy requested more data from the county so he could offer a more specific plan.
“Our approach is a little bit different,”
“It’s not the products that you get; it’s what you do with the products and how you design them.”
The board agreed to supply Murphy with more information as they prepare for major decisions on the future of the county’s health insurance program.