To help pay for the overhaul of the nation’s healthcare system, a $63-per-person fee will be imposed next year on employers’ group insurance plans, as well as individual plans.
The fee will be collected for three years, diminishing in its second and third years. It will create a $25 billion pool to mitigate the cost of providing private health coverage to individuals with pre-existing conditions and those entering the marketplace through state insurance exchanges.
Springdale-based Tyson Foods, one of the world’s largest meat producers, expects the fee to cost it $10 million in 2014.
“Most of our 97,000 U.S. workers have health-care insurance through our company,” Gary Mickelson, director of public relations, said in an email. “We view this re-insurance fee as a tax, especially since it provides no direct benefit to our company. … We currently plan to absorb this expense next year rather than pass the burden on to our employees.”
The fee will be imposed on each member of a plan,including spouses and dependents. So the cost to insure a family of four that fits that description would be $252.
As for the impact on premiums across the board, speculation is that they will rise 1 percent or 2 percent.
Cynthia Crone, director of Arkansas’ exchange, said insurers that have submitted their rates to exchanges in other states are keeping their rates about the same as they are for 2013, and in some cases lowering them.
Five insurers have applied to participate in Arkansas’ exchange market. They are Blue Cross and Blue Shield of Arkansas, Celtic Insurance Co., National Blue Cross Blue Shield Multi-state Plan, Qual-Choice of Arkansas and United Security Life and Health Insurance.
The reaction from Arkansas employers has been mixed, said Fred Bean, a member of the state exchange board and president of Bean Hamilton Corporate Benefits, which manages employee benefits for companies.
Some view the fee as a small add-on to the cost of insurance for the self-insured plans - generally larger employers that take on the risk of providing insurance.
Mike Ferguson, chief operating officer of the Washington, D.C.-based Self-Insurance Institute of America, doesn’t think the fee will cause businesses a hardship.
In fact, some may not pay and will fall through the cracks, especially if they cannot be found by the federal government.
There is no “master list” of companies that self-insure, Ferguson said. So when the federal Health and Human Services Department seeks to collect the fees, they may have a problem.
There is a partial list, derived from a federal form that employers with more than 100 employees file with the Department of Labor, he said.
As a result, “the federal regulators don’t even know where all the self-insured plans are,” he said.
Judy Diamond and Associates in Washington, D.C., which advises employers on benefits, said that at the end of 2011, there were about 45,000 self-funded plans in the United States.
Blue Advantage Administrators, an arm of Blue Cross and Blue Shield of Arkansas, manages self-insured plans for about 70 Arkansas companies, said Blue Cross spokesman Max Greenwood. She declined to name the companies.
The fee benefits the insurers that are participating in state insurance exchanges set up under the federal Patient Protection and Affordable Care Act, Ferguson said. The pool resulting from the fees, in effect, provides insurance for the insurance companies, and at the same time the program throws more business their way. Blue Cross will be a participant in Arkansas’ exchange.
Supporters of the fee say that it indirectly helps businesses by eliminating uncompensated medical treatment - in emergency rooms, for example.
Uncompensated treatment drives up costs for the entire health-care system, the argument goes.
Windstream Communications, Little Rock-based telecommunications firm, is taking the fee in stride.
“This is just one of many components of the new health-care legislation that we are analyzing as we develop our employee benefit plans for 2014, and we certainly will comply,” David Avery, vice president of communications, said in an email.
“The vast majority” of the company’s 13,500 employees in 48 states are covered on the company’s insurance plan, Avery said.
Front Section, Pages 1 on 07/14/2013