“ObamaCare” will Cost West U Employees $75,000 in 2014
The Affordable Care Act, popularly referred to as “ObamaCare,” went into effect today, but City of West U employees will not see a difference in their health insurance until January of 2014, when they will have to absorb $75,000 of additional costs related to implementing the federal program.
The city has already absorbed about $50,000 in annual inflationary costs from their healthcare provider, Blue Cross Blue Shield. The additional $75,000 comes from administrative overhead costs relating to the Affordable Care Act.
“Unfunded mandates are never attractive to cities, and this is another example of an unfunded mandate which, unfortunately, we had to pass along to the employees,” said City Manager Michael Ross. “It’s not something we want to do, but it is something that is out of our control. We get them from the state periodically, and this is one of those federal unfunded mandates that employers don’t have a choice about implementing.”
Based on the city’s current estimates, which could change, employee only coverage will increase by $18.12 per month. Employee plus child coverage will increase by $33.53 per month, employee plus spouse coverage will increase by $39.90 per month and employee plus family coverage will increase by $58.01 per month.
West U pools their employees with the cities of Webster, Dickinson and Friendswood to take advantage of lower rates for larger groups. West U currently has 125 full-time positions. All full-time employees are required at a minimum to enroll in the employee only program, but the city pays a large share of all health insurance premiums.
Currently, and until the end of the year, employee only coverage costs a total of $453.05 per month, and the city covers 100 percent of that cost if the employee takes part in the city’s wellness program. If the employee does not take part in the wellness program, they pay $90 per month.
Employees plus children currently pay $200 of $838.25, employee plus spouse costs the employee $250 out of $997.47 and employee plus family costs the employee $275 out of $1,450.25.
Along with the added administrative fees for 2014, the city will pay an additional penalty tax in 2018 if their quality of their coverage is not dropped from what is called “gold” coverage down to “bronze” coverage.
West U Human Resources Director Wendy Standorf says the city currently provides what is being called a “Cadillac plan” and is considered a Gold Plus Standard.
Under the current plan insurance pays about 82 percent of costs. Under a Bronze plan, that percentage drops to about 60 percent.
“If we have the same plan in 2018 we will have to pay a penalty because we are providing a better plan than the bronze level plan,” said Ross.