Tag Archives: insurance benefits

Affordable Patient Care Act - AZ Business Magazine November/December 2011

Affordable Patient Care Act May Cause Businesses To Drop Healthcare Insurance

Although most small businesses in Arizona aren’t dropping their healthcare insurance plans right now, some are thinking about doing it when the Obama administration’s Affordable Patient Care Act is fully implemented in 2014.

Meanwhile, many small business owners are also looking for new plans that will save them money, but may also slash benefits for their employees.

“We’re not seeing a dramatic drop in coverage as of today, but small businesses are asking a lot of questions about the health care reform act,” says Jeff Stelnik, senior vice president of strategy, sales and marketing for Blue Cross Blue Shield of Arizona, which has more small group customers than most other health insurers in the state.

“Companies with from two to 49 employees are also thinking about whether it makes sense for them to drop their coverage. Those with from 50 to 100 employees and beyond are less likely to do that.”

On one hand, the smallest companies — from two to 49 workers — are not required to provide insurance for their employees in 2014 and are not subject to any penalties. Those with 50 or more employees will face fines for failing to do so. So that in itself makes it easier for the smallest firms to cancel coverage.

Another incentive for small businesses to end insurance benefits is that many now offer plans with high deductibles, ranging from $3,000 to $5,000, and requiring “strong” co-payments. These types of plans don’t meet the minimum requirements under the Affordable Patient Care Act. That means that as of 2014, they must upgrade their plans at great expense in order to keep insuring employees. Although some federal tax subsidies will be available to help small companies, it is still expected to be costly for small businesses to provide more generous health benefits to employees.

But even though the smallest businesses are considering dropping health insurance, “they absolutely would like to keep it if they can,” Stelnik says.

“If small employers drop coverage, they will probably give employees a bump in pay — another $50 to $75 in their paychecks,” says Thomas Katsenes, president of Katsenes Insurance in Phoenix. “But that’s not going to help those employees much when they go out to buy health insurance.”

One of his clients, who owns several fast-food franchises, is considering canceling an insurance plan it has for managers; the business does not cover other employees. The franchise corporate office provides no health insurance. “Those businesses most affected are the ones with fewer employees,” Katsenes says.

The full impact of the health reform legislation may not hit until 2014, but some changes already phased in have helped raise current health insurance costs by 15 percent and more, according to Katsenes.

“They’ve already phased in the mandated no-cost wellness benefits (like free mammograms for women) and the unlimited lifetime maximum costs for the insured, and they’re requiring coverage up to age 26 for children,” he says. “All these changes translate into higher premiums.”

Another broker, Bob Padgett, president of the Padgett Insurance Agency in the Phoenix area, hasn’t seen any cancellations yet, but some of his clients are looking at plans with $10,000 deductibles as well as partially self-funded insurance plans.

“Some businesses are reducing coverage for their employees, passing more of the cost on to them or no longer offering coverage,” says Donna Davis, CEO of the Arizona Small Business Association, a group in which 85 percent of the membership has 100 or fewer employees.

“In a recent survey of our members, 74 percent indicated that the cost of healthcare was a significant challenge to the future of their businesses,” she says. “Most businesses have seen consistent year-over-year increases even before the Affordable Patient Care Act was enacted.”

Some employers are investigating defined benefit plans that allow six doctor visits per year and pay a limited amount per day for hospitalization, Katsenes says. “I may have a client who will be going for that soon. He has 15 employees to insure.

“It’s unknown what lies ahead for small businesses,” Katsenes adds. “So far we’ve dealt with about 900 pages of regulations and another 100,000 pages lie ahead.”

[stextbox id="grey"]For more information about the Affordable Patient Care Act, visit healthcare.gov.[/stextbox]

Arizona Business Magazine November/December 2011

 

Workers' compensation laws for injured employees/employers

Workers’ Compensation Laws Provide Protection For Employers And Employees

Workers’ compensation insurance is like an old sweater — it’s there when you need it, but you may not think about it much until that time comes. However, it’s not a bad idea to pull it out every now and then to make sure it still fits.

Here are some points to keep in mind as you look in the mirror.
Workers’ compensation laws in Arizona are designed to protect both the employer and the employee when the latter is injured on the job. The most important thing to know about workers’ compensation in Arizona is that insurance is mandatory for every business — public and private — that has one or more employees.

It also is important to understand that workers’ compensation is a “no fault” system, meaning that insurance benefits generally are made available no matter who is to blame for the employee’s injury. Injured employees are entitled to full-medical benefits and lost-wage compensation while they are unable to work, with no cost or time limits. Job retraining benefits are sometimes provided, as well.

Although workers’ compensation insurance is mandatory for employers, Arizona law allows an individual employee to opt out of the system.

Those who choose to remain covered by an employer’s insurance — and the vast majority of workers do — generally give up the right to sue their employer or co-workers for their injury in exchange for the security of receiving insurance benefits as provided by workers’ compensation laws.

Those who opt out retain the power to sue their employer for damages resulting from on-the-job injuries. However, they are required to prove negligence, which can be a difficult task.

Arizona businesses have three options for obtaining workers’ compensation insurance: they can purchase coverage through a private insurance carrier, they can self-insure or they can be part of a competitive state fund, such as the privately operated State Compensation Fund, or SCF.

Small businesses also may have the option of joining with others in related fields to purchase a group insurance plan.

The most important thing to keep in mind if an employee is injured on the job is that a claim with the workers’ compensation insurer must be filed as soon after the incident as possible. Thus, employees should be trained to notify their supervisors as soon as they are injured to ensure timely claims reporting.

Workers suffering temporary or permanent total disability receive payments determined by a percentage of their wages with a maximum weekly pay out. Benefits continue for as long as the employee is disabled. In the event of an on-the-job death, benefits based on a percentage of the worker’s wages are paid to his or her survivors.

Although workers’ compensation laws are designed to curtail lawsuits, there are situations where employers or insurance carriers may face legal action by an employee and will require legal counsel.

The most obvious case of liability exposure is when an employer fails to carry workers’ compensation insurance and a worker is injured on the job.

Another legally hazardous situation is when there are multiple employers on a single job site. A construction site is a good example of this, as is an office setting with an independently operated print shop or snack bar. If a person employed by one company is injured by an employee of another company, the injured worker may be allowed to sue the company that does not employ him or her for damages. An employer is only protected against suit by its own employee, not someone else’s employee. Therefore, it is important to make sure the work site is as safe and hazard-free as possible to prevent on-the-job injuries.


Those who opt out retain the power to sue their employer for damages resulting from on-the-job injuries. However, they are required to prove negligence, which can be a difficult task.


Finally, when a workers’ compensation claim is denied and the employee appeals, the case works its way through the Industrial Commission of Arizona and, eventually, into the courthouse. At that stage, we recommend the employer seek assistance from an employment law specialist.

Thankfully, most of the time, the system runs as it should, the old sweater still fits, and it stays on the shelf, waiting for that rare bad-weather day.

Greg Coulter and Steve Biddle are shareholders in the Phoenix office of Littler Mendelson, an employment and labor law firm representing management. They can be reached at (602) 474-3600, or GCoulter@littler.com or SBiddle@littler.com