The plan offered is a local HMO with benefits that are far better than the minimum essential coverage that HHS defines as “quality”. A brief summary of the benefits include a $300 deductible, $10 copays for PCP visits, prescription card with $8 generics and $25 formulary drugs, and a worst case scenario (OPM) of $3000 per person. I don’t know of anyone who wouldn’t want to receive a benefit like this at no cost to them. But I can’t offer it next year.
The actuarial value of the plan is 86.9%. This is outside of the insanely restrictive “metal tiers” so next year I will lose my plan. In 2014 small employer plans must fall within a narrow band of actuarial values. They are 90%, 80%, 70%, and 60% with a deviation of +/-2%. At my current level it leaves me with a choice to either offer a better benefit or reduce the benefit regardless of cost.
While losing the plan is disappointing, that is the least of my concerns. The insurer has also informed us that I should expect a significant (said over 40%) increase in my premiums next year. This is due directly to community rating. We are being penalized because we are such a healthy group. This doesn’t include the new taxes that take effect starting January 1st. That will increase my premiums by $887 more in 2014.
I can’t absorb a hit of close to $10,000 in additional cost without some sacrifice. So what will it be? Drop my plan? Can I pass the cost on to my employee? How about take a pay cut? Maybe I shouldn’t give a raise? Does it make sense to eliminate a retirement benefit? Perhaps I can lower my overhead?
Whatever the outcome, it won’t be good. One thing is certain; I owe it all to Obamacare.