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Patrick Chestnut President & CEO
While the warm August temperatures ushered in the summer heat, it also unleashed the first installment of the Affordable Care Act (ACA), the new Women's Preventive Health Amendment, that went into effect August 1. This follows on the heels of the historic Supreme Court decision that upheld the ACA. The political machines are in high gear, cranking out the press releases, trumpeting the new requirement, and providing very little substance to those who will actually receive the benefit. In an interview I did last month, for the Seattle Business Magazine, on the subject of healthcare reform, I mentioned the cost and confusion created when politics and mandated benefits intersect. Today's example is the Women's Preventive Health Amendment.
Here are some important things to know about the new regulation for those employers who are not covered under AAOA Healthcare.
1.) The amendment is not just a contraceptive mandate for insurance carriers. The new law requires health insurance plans to cover all FDA approved forms of contraception and the other areas listed under the gender specific preventive health services. Plans will no longer be able to charge co-pays for contraception. Insurers must now cover domestic violence screening and counseling, annual preventive care, pap smears, pelvic exams, and breastfeeding supplies. For many women in Washington State preventive care including pap smears and pelvic exams were already included in the wellness benefits of their coverage.
2.) The new law took effect on August 1, however, for many it may take a while to become effective. The regulation begins at the start of a new benefit plan year, so if your benefit plan year begins August 1, you may be eligible immediately. Plans that have grandfathered status are exempt from some of the new regulations, including the women's preventive health regulation. Grandfathered plans will not be required to provide no-cost contraceptives until 2014.
3.) The no-cost nature of this legislation could determine what form of contraception a women chooses. Intrauterine devices are the most effective and tend to be the most costly form of contraception. Women have been trending toward permanent forms of contraception in recent years, and the removal of the cost barriers is projected to increase the number of women choosing these options.
4.) This benefit has created heated debates politically and is now in the courts. Women should be advised that there is a real possibility that the courts could eliminate this mandate. If women change their choice in contraception and the benefit is eliminated by the courts, they may be forced into paying a higher cost than expected. There are a number of legal challenges under way that are based upon religious beliefs and freedom to practice religion. The legal scholars predict they have a decent chance of having the regulation overturned.
5.) No-cost contraceptives, for subscribers and dependents, doesn't mean it is free. Health plans will end up paying the cost and the increases in cost expected with this benefit. This will work its way down to the employer and individual subscriber cost. A study by the Guttmacher Institute estimated that adding the no cost contraceptive coverage will increase health insurance spending by $21.40 per person. While the administration disputed the increased cost projection, a number of studies done at the state level determined that state mandates on contraceptives have in fact, increased subscriber costs.
At AAOA Healthcare we made a very important decision when the ACA was passed. We grandfathered all of our coverage options for employers. We did not take this decision lightly. We were concerned what the consequences would be if national healthcare reform repeated the tumultuous benefit period we experienced in Washington State, during healthcare reform in the mid 90s. We knew that our members needed predictability and stability with a struggling economy and the uncertain times that health care reform would create. We also knew that employers would not be able to absorb more cost in the benefit plans from a number of the new proposed mandates and requirements.
We have already witnessed and experienced regulations being issued and then withdrawn or modified, affecting the benefits of the plans that did not choose to seek grandfathered status. These types of changes simply create confusion, increases in cost and a loss of employee productivity for employers and the employees. Employers provide a valuable benefit to their employees with the coverage that is provided, and we will continue working to do everything we can to keep coverage affordable, so small employers have benefits as a way to attract and retain the best employees.
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