update from the reader worried her employer was going to drop their health insurance

by Alison Green on December 9, 2013

Remember the reader back in March who was worried that her employer was getting ready to drop their health insurance? Here’s her update.

I did take your advice and got up my nerve to directly ask. I actually started with the accountant first, as I have a closer relationship with him and was able to work the topic into conversation. He said what some of your commenters said – that it was likely an emotional reaction to the cost increase and probably not serious. Nonetheless, I did find an opportunity to speak to the owner and make the points you suggested. She continued to act wishy-washy/doomsday about it, but nothing ever ended up happening. We still have the same insurance, and nothing has changed, other than I probably have a few more gray hairs from worrying about it.

On a side note, since the time I wrote you, as you know the Affordable Care Act has started to go into effect, and out of curiosity I priced out a plan for our company through the small business exchange – it came out that our same plan on the exchange would save over $20K a year. I’ve presented this info to the owner, so hopefully she will look into it and it will take some of the pressure off as far as increases in rates go. Even if she doesn’t pursue it, I personally feel much more comfortable now knowing that the exchanges exist as a Plan B if she did drop the company insurance or if my job was eliminated. While I’m still job hunting, I feel more doors have been opened to me – some of my friends and I have even talked about striking out on our own and forming our own business partnership, now that we can buy individual insurance on the exchange, so who knows what the future may bring!

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  1. Anonymous*

    I would love to know what state the OP is in. In mine, the plans that have equal coverage to what I have now cost 40-50% more.

      1. Anonymous*

        … or if the OP is a government shill trying tell us how great the Affordable Care Act and the exchange “really” is.

          1. thenoiseinspace*

            Gasp! Didn’t you know? The government WATCHES all the sites with high hit counts and plots out these things years in advance! Why, just the other day, someone over at Foster Dad John dug up an old post from four years ago with this very subject matter. The horror!

        4. RG*

          Eyeroll. These things really do vary from state to state. Even between counties within a state.

          And chances are that the line up in coverage and network probably isn’t one to one, but they could be pretty comparable.

        6. OP*

          You know, I knew someone would say that, and I considered leaving that part out of my letter for that reason, but I left it in because it is true, and I think it was important to include. For my company, that amount of money saved will be a big deal. For me as an individual, the availability of affordable health insurance to anyone, even people with pre-existing conditions, is something that absolutely affects my career choices and the kinds of opportunities I can now consider in the future that I had always thought would be impossible or very difficult, i.e. starting my own business, freelancing full time, working part time while being a caregiver to a parent or child, or interviewing with nontraditional companies or startups who do not offer insurance yet.

          It’s not just me. I would guess that we all know people who get stuck in dead end jobs because its the only way they can get insurance they can afford, or who take menial jobs that hurt their long term career prospects because they need to provide insurance for their families. On the other side of that, there are all lot of great companies who are so small they did not have insurance for their employees and thus could not attract top talent, or companies like mine, where they were considering (or already did) dropping insurance and left their employees in a pickle. You can feel however you want to feel about the theory/politics of healthcare, but the fact is that the new law has opened new options to individuals and small businesses, and those new options will undoubtedly influence the way people manage their career paths.

            2. PEBCAK*

              For me, the ACA isn’t even about pre-existing conditions, it’s about knowing that, if I DO get sick, the insurance company is going to pay out, not come up with some excuse to drop me.

              My cousin is an independent contractor, and she paid premiums to BCBS for over a decade, and when she needed a heart valve replaced, they called it a congenital defect and fought her every step of the way.

              2. Anon for this*

                Funny, just yesterday, my daughter’s new, fancy insurance denied all coverage for her hospital stay. But hey, who cares about the kids, amirite?

                (the point being, no, insurance carriers aren’t suddenly paying out on claims they weren’t paying before–they just can’t DROP you. You still have the privilege of paying them premiums. Well, “privilege” isn’t the right word, since it’s legally required and all)

                1. Elaine*

                  If the hospital stay was medically necessary, you or the hospital should be able to appeal this decision. Sometimes the wrong billing code is entered.

          2. sunny-dee*

            This may be true for you, and I am glad someone got some benefit from it. But my brother lost his health insurance because of the ACA, my aunt was dropped from F/T to P/T *and* lost her health insurance, and my father’s retirement (which used to include health benefits) was restructured (and now does not include health benefits) and he’s only 4 years away from retiring.

            1. The Clerk*

              Those are all actions decided upon by the employers because they didn’t like the new rules of the country they want to do business in. It’s not because of the ACA, it’s because the employers believe the cost of doing business should be paid by everyone but them.

              1. Bea W*

                +1 Even before ACA went into effect, some of my friends in certain states were being read the scare act at their min wage parttime jobs. Really, if you’re internationally recognized franchise can’t afford the one crappily paid part time person working each shift that sweeps floors and cleans toilets, you’ve probably got bigger issues than ACA.

              2. sunny-dee*

                @The Clerk, my aunt works for a school district. The entire district did away with teacher’s aides because (the principal told her this) they couldn’t afford the required health insurance increases once the ACA kicked in. They begged her to come back as a substitute, but it is part-time work, uninsured.

                For my brother, he works for a very small employer. Their small group coverage was one of the millions canceled this last autumn.

                Both were direct losses because of the ACA.

                1. AVP*

                  If you work for a “very small employer” the ACA doesn’t apply. Yes, certain health plans are being dropped at part of the law, but there are SO MANY new ones at reasonable rates that would apply. Granted, the website is hard to figure out and sometimes doesn’t work, but if it’s someone’s job to figure it out and find the new option, that should be…something that they do. For money. Because it’s their job. And then your brother would have health insurance! And we would all be happy.

                2. sunny-dee*

                  AVP, the small employer is small enough that the employer mandates don’t apply (which is why they can drop my brother). But their previous plan was canceled as part of the individual and small group mass cancellation this autumn. The owner is very good friends with my brother; they have been working since August to try to find an affordable replacement. The replacement plan from their insurer was over three times their previous cost (with a substantially higher deductible), so it wasn’t feasible to use that. They didn’t find any plan on the exchange that met their needs, though I don’t know what made them unappealing. (I got all this from talking with my brother at Thanksgiving and then again earlier this week.)

                  There are few good plans. I used to buy my own insurance. My deductible was $2700, major medical only (I have no prescriptions or medical needs), and I paid $80 per month (note: I canceled my plan in 2011 when I started a new job). The closest plan on the exchange has a $7500 deductible and costs almost $400 a month. That is a TERRIBLE deal.

                  And then there’s the doctor availability.

                  This varies by state and by county, so some states may have very different experiences. But I can testify to three states (Oklahoma, Texas, and Montana) where the insurance situation is much worse than it used to be.

            2. Anon for this*

              This happened to my husband, too (yes, in one month, my husband lost his insurance, and we ended up with an out of pocket hospital bill for my daughter because the fancy new insurance didn’t actually cover it…to say that I am angry would be an understatement). He is unemployed, so he’s on COBRA. We could afford the COBRA premium, and liked the plan. The plan has been cancelled because of the ACA, and replaced with a plan that costs over twice as much, which we cannot afford. Healthcare.gov ate our account and will not let me log in to finish the application that I couldn’t send the first time because the site was broken–but the whole first step is a waste of time anyway, because I already know the marriage penalty will prevent my (unemployed!) husband from getting any subsidies. Even if we COULD get in, though, based on the other premiums I’m hearing about, the premium for an overweight smoker with a pre-existing condition is going to be through the roof. So yeah, we’re paying the penalty-tax.

              1. Kathryn T.*

                The pre-existing condition and weight are not going to affect your premiums. They don’t / can’t ask about either of those. Your smoking status will, though. My family of four is going from a plan that costs us $715 per month and doesn’t cover prescriptions, mental health, or rehab/therapeutic services to one that costs $607 per month and covers all those things, with a deductible half as high as before. And we were on the $715 plan because we couldn’t afford our COBRA payment of $1955 for all four of us.

                1. Anon for this*

                  His COBRA payment was $250/month, and it covered everything you mentioned. We actually really liked it. I was JUST able to shoehorn $250 into the budget (since he is not working and all, the budget is significantly condensed). Anything above that will pose a huge problem.

          3. sunny-dee*

            It’s not just me. I would guess that we all know people who get stuck in dead end jobs because its the only way they can get insurance they can afford, or who take menial jobs that hurt their long term career prospects because they need to provide insurance for their families.

            I’m sure you didn’t mean this as demeaning as it sounds because your comments otherwise have been very pleasant. But there is NOTHING shameful about working to support your family. I have a job because we have a mortgage and we like to eat and have electricity and occasionally go to the movies or binge-shop at Half-Price Books. If you’re lucky, you have a job you love. If not, sometimes you have a job you hate. My family and our well-being is more important to me and my husband than anything else. When I was single, I worked bad jobs because I had bills to pay; I would do that a thousand times more to protect my family. It is offensive to dismiss people who are working to support their families as somehow being less of a person or having less of a career.

            1. Ask a Manager* Post author

              That didn’t strike me as demeaning. The reality is that many people would like to move on to a different work situation but can’t/don’t because their insurance is tied to their employment. It doesn’t mean that you’re less of a person.

              1. Bea W*

                Yup. I was one if those people who was unable to take mych more than a part time min wage job because I needed health coverage and the only way to keep it was to stay qualified for Medicaid which meant struggling below the poverty level and not being allow to save money in the bank. The alternative would have been to go without treatment for chronic and otherwise debilitating conditions and be unable to work or go to school at all, plus costing whatever ridiculous tax payer money in ER visits. The medication I needed did not yet come in generic and retailed several hundreds of dollars a month, not to mention the cost of specialist visits.

                I crawled out of that hole before RomneyCare, but only because once I had enough education and training under my belt and the economy was at a rolling boil I was able to get a job with the health coverage I could afford and that kicked in on Day 1. Having access to affordable health care makes a huge difference to some people.

                1. anonomouse*

                  Is AAM f0ror against ACA?
                  I don’t recall.

                  I was for it after I realized I would be released from indentured servitude, but then I read California docs refuse to accept it. So ACA becomes a policy with no providers. My crappy HMO through work is pathetic enough,with few providers taking it. I think my doctor dies because he cares first for patients, but most docs work on a business model and look for top dollar.

                2. Ask a Manager* Post author

                  I think it’s a flawed policy (like most legislation), but I think it’s a huge step in the right direction, particularly in regard to pre-existing conditions and beginning to untether insurance from employment.

                3. Bea W*

                  In addition, if MA did not already have laws in place pre-RomneyCare regarding coverage for pre-existing conditions, I would have been SOL. When I found myself job hunting after Romney Care, it did expand my options. My field has moved towards outsourcing and contract employees. Now that I don’t need to rely on an employer for insurance, I can consider those jobs, because while I could have gotten by self pay for a few years in my 30s, my 4th decade is not being kind in different ways. There’s no way I’d go without coverage for emergency care, hospitals admissions, surgery, and specialized tests. Just the 911 call alone will set you back at least a grand and that’s just for loading you up and driving 3 miles. I hope my body has the foresight to time a cardiac arrest while I’m already visiting a hospital for some other reason. I can’t even imagine the bill for needing to pull out the more fancy equipment.

                4. Bea W*

                  ACA itself is not an insurance policy, and therefore can’t be declined as a plan that is not accepted. It makes private insurance plans available to everyone, and those are the same plans doctors already take.

                  The problem we did have in MA, is that once everyone had access to health insurance, doctors were initially overwhelmed with the volume of new patients, and it became hard to find a PCP who was able to take on new patients – brand new patients. If you already had a doctor, but switched plans and were able to keep the same doctor, you were safe. It was only people who needed to find a new doctor because they didn’t have one to begin with who ran into this issue.

                1. KLH*

                  Also, hospital chains are beefing up their primary healthcare–the one I work for is opening primary care offices so if someone gets discharged from the ER they can be recommended to one of those offices and get an appointment, and not come back to the ER.

              3. Anon for this*

                The solution to that particular issue is to get rid of the tax distinction between employer-provided insurance and individually-purchased insurance, so they aren’t tied together. The ACA doesn’t do that–it just slaps a 40% tax on some larger plans, and then requires a certain category of employers (over 50 employees) to provide insurance. That is the direct opposite of untethering insurance from work, as you mentioned below.

                There is no logical reason your health insurance should have anything to do with your job.

          4. LMW*

            I’m actually really glad to see that there are positive benefits for some people. Most of the people (including small business owners ) that I know who have tried to use have faced nothing but headaches and been offered really awful policies.
            I’ve been buying my own insurance for years (no preexisting conditions, and I’m fairly young, so I had access to really good, affordable policies, even without employer support), and had I not changed jobs and been offered new insurance through my employer, the policy that I had and liked would have changed pretty drastically (higher deductible, much more out of pocket overall) and cost double per month.
            While I think that there are some real issues happening, I also think that stories like mine and my friends’ are the most reported too (kind of like negative reviews on Glassdoor). So it’s nice to hear a good story for a change, especially since we’re stuck with this new system. I might find myself shopping for an individual policy again sometime soon, so all the doom and gloom is really freaking me out.

            1. Zillah*

              I haven’t had to sign up yet, but I can say that ACA has made a huge difference in my life, too.

              I have a preexisting condition, and I’ve been terrified of aging out of my parents’ health care. ACA meant that I was able to stay on it through the tough couple years after I finished undergrad where I couldn’t find a good job and/or was only doing grad school part time.

              It also means that now, it will be feasible for me to buy insurance for myself next year when I do finally age out of my parents’. My concern has never been about how much the plan costs – my biggest fear has always been about being unable to find one at all.

              It’s definitely a mixed bag, but there are a lot of positives.

              1. Jenna*

                I’d prefer universal payer, or a public option, but, I’ll take the ACA even with it’s technical difficulties and complications….because for me it’s a choice between that and always having to stay employed by large corporations with good health insurance plans.
                I have been fighting cancer this year, so, if I have any gap in coverage I would have been uninsurable. The subsidies bring the plans within reach for me(I’m in California). I’d prefer not to go bankrupt due to medical bills, thank you very much.

                1. Anonymous*

                  Late to this discussion, but agree with this completely. I am a 15-year cancer survivor and, despite no problems since then and very good health, I am uninsurable on the individual market. My husband and I always had to make career decisions based on insurance; my big fear was a recurrence and bankruptcy. I am also in California and we are not eligible for any subsidies, but an ACA plan comparable to what my employer now offers is less expensive in terms of total cost.

        7. Joey*

          I love it. This is all carried out by the same people who forged Obamas Hawaiian birth certificate, right?

          1. Cat*

            And who had the foresight to put a birth announcement for a random Kenyan-born child in a Hawaiian paper 40 years before he embarked on a political career. Smart people!

            2. Jenna*

              In the 60’s in America, even.

              I was born in the 60’s, and I wasn’t expecting anyone but white males to be elected for another decade or two from now. I was pleasantly surprised to be mistaken…

              but, in the 60’s? Planning for the election of a baby with a Kenyan parent? When the kiss on Star Trek was as huge a deal as it was at the time? Really?

        9. Daisy*

          Dear AAM, I work for an unnamed national space agency. They want me to work overtime to fake some moon landing footage, but I’m non exempt. Is this legal?

      2. Meredith*

        Precisely. If you’ve got a pre-existing and individual insurance and you price it through the federal exchange, you’re likely to end up better off. I certainly did, even with a fancy plan.

      4. OP*

        I’m in Illinois. $440/month for a plan that is basically catastrophic with little else. Same plan on the exchange is $275 and actually its a little bit better coverage on the version of the plan on the exchange in terms of what the copays, deductible and prescription drugs would be.

    2. Brett*

      I’m in Missouri, and the equivalent ACA plan (Silver) to my current plan with a local government employer is less than half the cost of just my employer provided portion of my current plan ($197/mo for the ACA plan compared to $442/mo for the employer plan).

      Employer subsidies really hide the high cost of employer provided plans.

      1. Brett*

        And just to add to this, the zero deductible gold plan in our state is $213.38/mo. It has a way lower deductible, lower copay, lower coinsurance, and much lower out of pocket maximum than my employer provided plan. But… the employer pays the entire cost of my plan. Realistically, if they dropped my insurance and bumped my pay $250/mo, they would save my money (even after the penalty) and I would have higher take home pay and better insurance.

        (Since we are a public agency, my employer gets no tax break by paying our insurance instead of paying us more.)

  2. DMC123*

    My Two Cents:

    Just a bit to consider – While the premium of the Exchange program may appear a better price/reasonable/ect – PLEASE consider the very high deductibles and research before entering.

    There are different plans; gold, silver, platinum with the deductible extremely high at the cheapest premium plan. On the lowest plan, if something does happen health wise, you could be paying thousands in deductibles before you actually receive coverage.

    1. sunny-dee*

      This. ^^^ Also, you actually can’t get any of the exchange plans — the backend system isn’t working. So, the subsidies which lower the prices aren’t applied if you purchase directly from the insurer (which you have to do since the backend isn’t working). My brother’s employer dropped their coverage and he has had a terrible time trying to use the exchange. My aunt was cut to part-time and lost her insurance; ultimately, she had to go through an insurer and can’t get any subsidies — but the deductible was so much higher on the exchange plan that it was worth it to her.

      FWIW, I anticipate losing my insurance *next* year. My benefits year was April – March, but they switched it this year, so we had one benefits year that ran April to December, and then we’ll be doing January – December. The employee mandates were supposed to kick in January 2014 (what a crazy happenstance), but that got pushed back. My guess is that I’ll lose mine once the mandates go in effect (which may, incidentally, be why this woman still has her insurance).

      1. RG*

        Depends on the exchange – 20 some states have their own exchanges, the rest are on the federal one. Just be care about applying exchange experiences universally.

        1. sunny-dee*

          Actually, 14 states have their own exchanges, 36 and DC are Healthcare.gov. Of those 14, at least two that I can name (Oregon and Missouri) have the same backend issues that Healthcare.gov has. Others, like California, are slightly more functional than the others (which are not functional at all), but still have enough errors that there are serious questions about the ability of insurers to process enrollments or the government (state) to process subsidies.

          1. sunny-dee*

            For disclosure, my brother and aunt are both in Oklahoma, which uses the federal exchange. My dad is in Alaska; he’s keeping his health insurance until he retires, so I don’t know if Alaska has a state or federal exchange. He hasn’t tried to use it.

          2. Goofy posture*

            DC has its own exchange. No major reported issues with it that I’ve noticed, and I follow local news.

        1. FreeThinkerTX*

          From what I’ve seen in the news, using the phone service will get you nowhere as well, because the reps on the other end of the phone are using the *same* back end system that website users are.

    2. OP*

      Oh believe me, I did! Our deductible would remain the same, and our coverage would be slightly better. I realize this is not the same for everyone, which is why research is important, but for me it works out much better.

      1. Elaine*

        Yes, I read that, in some states (like Montana, for sure) had very few (as in two) health insurers, so prices stayed very high. I wish they’d allow insurers to compete across state lines to assist with this. That should have bipartisan support.

    3. Betsy*

      I agree with this, but I note that a lot of existing plans people had came with high deductibles. I’m in MA, and a couple of years ago, I was without employer-provided care. My cheapest option for health care that would qualify to avoid the tax penalty was $890/month, and came with a $5000 deductible. I paid the penalty, because I said if I had a choice between giving several thousand dollars to the government or over $10000 to private insurance company each year for a likely return of around $800 (the cost of 5 primary care visits), I’d choose the government, which has a slightly higher chance of doing something good with it.

    1. Kerry*

      I agree. I’m really glad to hear things are working out for the OP but I always have to skim past people talking about job-linked health care because it makes me feel so panicked and anxious just thinking about it. I’m glad the situation isn’t what you thought it was, OP – congratulations for your communication skills! :)

    2. Anonforthis*

      I’m not going to get into the politics of the whole healthcare thing, other people can (and will I’m sure) argue that. All I can say is that tying healthcare to employment causes tons of problems and I’d much rather we have a system that doesn’t do that. We can argue all day about what that system should be/is, I’m just saying that tying health insurance to employment is just not a good thing in my view. That is all.

      2. Anon for this*

        Yes, this. They are not logically connected. If the employers wants to offer insurance as a perk, they can offer a credit or something, but tying the two together so tightly has not worked out well.

        1. Beth*

          So true. I think the ACA is causing problems for more people than it’s helping, and I don’t think it’s the solution, but healthcare coverage tied to employment makes no sense. In the US we’ve lived with that system for so long that sometimes it’s hard to take a step back and think, wait, why is it this way? They don’t logically go together anymore than employment and car insurance, mortgages, or whatever else go together. (Some employers do offer those as perks and that’s fine, but obviously employment is not the major way to get those things.) Why don’t we tie public education to employment? When you start thinking about other fundamental services and imagining them tied to employment, the whole system seems more and more crazy.

          (For the record, I live in New Hampshire, which has only one provider in the exchange and major hospitals are refusing to accept the plans offered by that provider so yes, people are having to switch doctors. The prices are also some of the highest in the country.)

    3. Canuck*

      +1

      I read a stat that said 50% of all employed people in the US work for Small-Medium businesses. Which, for reasons of economies of scale, tend to be more expensive for the employee, have worse coverage, or are not offered at all by the workplace.

      Canada has many, many healthcare problems, but thankfully coverage is not one of them.

    5. AVP*

      Agreed. [I’m in New York, but have always had my own health plan.]

      Whenever I read stories about employment in Japan, and people being laid off and summarily having to move out of their job-supplied apartments, I’m like “What! I can’t believe people think employment-related housing is a good thing, how can you possibly survive being fired if something as essential as your home is tied to being employed by this one particular employer?”

      And then I remember that for many people, health insurance is more or as important as where you live, and we Americans are just as crazy in our own way.

    6. Liz*

      I know! My company can barely manage the work it exists to do — I wouldn’t entrust my healthcare to those people in a pink fit!

    7. Anne*

      Yes. I just can’t imagine.

      I grew up in the US but recently married a Scottish man and we are living in Scotland. We went back to the US for a wedding party with my family, and of course, the question everyone was asking was – “So, are you planning on ever moving back to America?”

      Our answer: We’d love to, but are terrified of even considering it until the US gets some decent employment laws and universal health care.

  4. Nyxalinth*

    The ACA isn’t flawless–nothing created ever is. There’s a lot of employers dropping insurance, some with good reason, others, not so good. The one things that not only push my buttons but then fry the controls are the jerkasses who decided “Gee, I won’t be able to afford another big fancy house/three more cars/make what amounts to pocket change for me less a year, so I’ll just screw my employees out of insurance and/or hours, instead” I’m looking at people like the guy who runs Papa John’s and a few others I can’t recall right now (Might be Hobby Lobby). Oh well, their pizza wasn’t my favorite, anyway.

    1. miche*

      Nyxalinth, if you look at Hobby Lobby’s issues with the ACA it is deeper than, “I will screw my employees out of insurance!!!”

  5. Beth*

    OP, not sure if you’re still reading responses here, but I’m curious. I haven’t needed to go to any of these ACA websites, so I don’t know how one goes about finding out costs after subsidies, etc.. What is your role at the company that you had all of the necessary information to find out what your premiums would be? Or is detailed information not necessary?

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