Health Care: What Now?

Well, Obamacare was signed into law today, so I guess we just have to react to the new reality. The first thing we did on Monday was to ask the obvious question: "How does this affect our insurance program?"

Bona fide wellness programs are still allowed, so we can continue to provide incentives to our employees who control their weight, cholesteral, blood sugar, blood pressure and smoking. That's good.

The amount that can be contributed to Flexible Spending Accounts (FSA's) is limited to $2500. We're not sure if that includes the employer's contribution or not. Right now, the company matches the employee's pretax contribution on a dollar by dollar basis, up to a maximum of $3000. Most of what I've read so far indicates that I'm going to lose that $500 of tax benefit.

Our company uses a high deductability health insurance plan. The first $5000 of medical care is the responsibility of the employee. Blue cross/blue shield doesn't cover any of the bills until that limit is reached. I like it that way because it keeps the premiums low, freeing up money for other purposes (like bonuses), and I don't consume much in the way of healthcare. After 2014, it is not clear if that type of plan will continue to be on the market. Based on the rhetoric, I'm afraid that high deductible plans will be outlawed once this legislation gets ramped up.

It's interesting that children can be carried on their parent's health plans until age 26. Tax law says that you lose the dependentcy deduction at age 24, and even then you lose it at age 19 unless the child is a full time student. With our current premium structure, adding family coverage to the employee's coverage adds less to the premium than the cost of adding another employee to the policy. It's easy to see how people will begin gaming the system under those rules. Once this becomes widespread, look for dependent coverage to rapidly rise in price to compensate.

I wonder whose idea it was to remove the lifetime caps on medical spending. Because, you know, going through a million dollars of medical care wasn't enough. Maybe if you get another million dollars of someone else's money, they'll find a way to cure you.

You can't help noticing that the unpopular parts of this legislation, like the requirement to buy health insurance, and the fines for not doing so, are timed to all take effect after the next presidential election is over in 2014.

I haven't yet seen when the surcharge on unearned income (interest and dividends) starts up, but from what I have read so far, that only impacts high income individuals. Like the people who decide whether to pay my bonus or keep the money for themselves. I'm probably going to be stung on that one.