Businesses get a glimpse of Affordable Care Act changes

When Hawaii’s health insurance exchange opens next month, there are exactly three things small business owners need to do, an HMAA official said Thursday during a Kona-Kohala Chamber of Commerce forum.

“One, nothing,” said Reg Baker, HMAA’s executive vice president, COO, CFO and treasurer. “Two, nothing. Three?”

Business owners, some chuckling, gave Baker the response he was seeking, “nothing.”

The health insurance exchange, which business owners with companies of 50 employees or fewer can access this year and next, as well as individuals looking for insurance coverage, will offer four levels of plans from Kaiser Permanente and Hawaii Medical Service Association. Those two companies’ rates for those plans go public Oct. 1. At that point, Baker said, other insurance providers will likely be reaching out with similar plans, marketed directly to small businesses.

Baker urged business owners not to rush into buying one of those plans.

“Sit down, let the dust settle and watch the deals come your way,” he said. “I think it’s going to be very competitive.”

The federal government exempted businesses with more than 50 employees from the new rules until 2016, so the exchange and connector will only be needed next year for smaller businesses and individuals looking to buy health insurance.

The Affordable Care Act remains a controversial topic, particularly in Congress, where an effort is underway, again, to defund the program. Kaiser Permanente Business Engagement Director David Tumilowicz said in some ways, though, it doesn’t matter what happens with the act, because insurance providers have already approved their plans for next year.

Companies can begin to view and compare plans Oct. 1, but the plans won’t go into effect until Jan. 1.

Tumilowicz said neighbor islands may see a slight financial benefit when the new rules regarding how insurance providers can set rates go into effect next year, because the rates will average out across the state. The new rate structures can only be based on employees’ ages, with no consideration for the cost of treatments employees needed in the previous year.

HMAA didn’t join the exchange for next year. An audience member asked Baker why not.

“I don’t necessarily make a habit of buying beta version software,” he said. “There’s a lot of moving parts (to the new law). I would prefer that HMSA and Kaiser be the guinea pigs.”

Tumilowicz was blunt when asked what the advantages are for Kaiser to participate in the exchange — there really are no benefits for the provider, he said. Kaiser and HMSA will pay a 2 percent fee for selling policies within the exchange, but the price of a policy within the exchange or outside of the it — the plans will be available directly from the company as well — will be the same. The insurance provider has to bear that cost, Tumilowicz said.

He said there are some benefits for consumers, particularly more transparency in how rates are set and what rates are available, so consumers can more easily compare health insurance plans.

Another advantage for consumers, Peter Amelotte, group benefits manager with Aloha Insurance Service Inc., said, was the ability to select different plans for different family members, based on individual health needs. He said calling the law the Affordable Care Act is a misnomer, because it will cost some people more. But it also opens up less expensive health plan options, he said.

Large businesses in Hawaii won’t likely see many changes once the rules are extended to them, Hawaii’s Affordable Care Act Implementation Manager Tom Matsuda said. That’s because Hawaii enacted the Prepaid Health Care Act in 1974 that already set minimum levels of insurance benefits that employers must provide. Hawaii’s rules in some ways are more stringent than the federal regulations, and the state already has a significantly lower percentage of uninsured residents — 8 percent, compared with up to 25 percent in some states.