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When the Supreme Court upheld the Patient Protection and Affordable Care Act (PPACA), the clock officially began for the states and businesses to plan on providing insurance coverage for their employees and citizens. The Affordable Care Act (ACA) is expected to help insure about 30 million Americans by both providing incentives for individuals to purchase insurance as well as requiring employers with more than 50 full-time employees to provide coverage.
While there are still details to be resolved in the judicial system, the 5-4 decision by the Roberts court signals the need for associations to plan on full compliance with PPACA. According to the ASAE Compensation & Benefits survey, more than 75 percent of associations, regardless of size, offer health insurance for their employees. However, the cost of providing insurance is a major budget item; in 2010, the average association’s premium rose 10 percent.
One piece of PPACA that ASAE believes could help alleviate many associations’ insurance costs is the requirement that all states form state insurance exchanges. The exchange is an insurance marketplace where small employers, those with fewer than 50 employees, and individuals will have the ability to shop for a more affordable insurance plan. The advantage of the exchange is that it allows small associations to join a larger employer pool (i.e., the other participants in the exchange), which creates a situation similar to how large businesses are insured: spreading out risks means more choices and lower rates.
ASAE has supported for a long time the right of associations to pool together to provide more affordable insurance to their employees. For years, we advocated for association health plans, which allow associations to create insurance pools across state lines and permit their members to buy into the insurance pool. While the exchanges are more limited – they are restricted to state or regions – the concept is similar enough to AHPs that small associations could see some cost savings if the exchanges are implemented correctly.
However, the implementation process is a concern for the association community. PPACA requires all states to have an exchange in place by 2014, or the federal government is required to create an exchange for them by 2016. Only 14 states and DC have created an exchange, according to the Kaiser Family Foundation. While some states were waiting to see the outcome of the Supreme Court case, they lost valuable time in beginning to create the intricate structure required to make a working Exchange.
We are very concerned that states will either be unable to comply with this requirement or rush to create a barebones, ineffective exchange, which would saddle small associations with continued rate increases and growing healthcare budgets. The federal government has been similarly slow to release its structure and plan for their exchanges, which again should worry small associations that are now relying on these potential insurance pools for affordable healthcare alternatives for employees.
The Supreme Court ruling confirmed a new reality for many associations, that the insurance changes they have been anticipating survived a major hurdle. While the original law could conceivably be overturned by Congress and the executive branch, the 2014 deadline looms large for the private and public sector. Government, both at the national and state level, have to work together on the state exchanges to ensure that this viable insurance option is available to small employers when PPACA is fully in effect.
During our March fly-in, ASAE expressed concern to congressional offices that many of the state healthcare exchanges would not be ready by Jan. 1, 2014, and many small associations may need that marketplace. We will continue these efforts to make certain that the exchanges are ready to go before individuals and small businesses need them to shop for coverage. Besides legislation, states will also need to upgrade computer systems, create governance and make other key moves.
Graham is CEO of the American Society of Association Executives. Details: www.asaecenter.org.