Offering affordable healthcare to its employees is going to be costly to Warren County government. An estimate puts the added cost for 2017 at $161,000.
Currently, the county contributes $378,000 toward its employees’ healthcare premiums. By Affordable Care Act regulations, that isn’t enough for the upcoming year to make insurance coverage affordable.
“I think everyone’s familiar with the Affordable Care Act. If you aren’t, some people call it ObamaCare,” said Finance Department employee Melanie Lanier. “We are here today because the new 2017 rates have been finalized for the state insurance which is how the county participates currently. The county contributes $225 per month for health insurance premiums for full-time county government employees. It’s been $225 since 2004. With premium increases, to remain compliant with the Affordable Care Act, we need to increase what the county pays.”
The lowest health premium offered through the state of Tennessee Insurance Administration is $426 for the upcoming 2017 coverage year, an increase from $381 in 2016.
ACA requires large businesses with over 50 employees offer minimum essential coverage providing minimum value to full-time employees at an individual rate equal to or less than 9.5 percent of the employee’s income. A full-time employee is any employee working 30 hours a week or more.
For a Warren County employee working 30 hours and making $8.50 an hour, the county must increase its contribution from $225 to $321, an additional $96, to ensure the employee is offered insurance that does not exceed 9.5 percent of the employee’s income.
“With the county only paying $225, it’s falling through the affordability threshold big time,” said Lanier. “Affordability requirement options require that no employee has to pay no more than 9.5 percent of his or her salary for us to be compliant with affordable care.”
Other numbers presented:
• An employee working 40 hours a week at $8.50 an hour will make $17,680. The county’s contribution of $225 must increase by $61 to be in compliance.
• An employee working 38 hours a week at $8.50 an hour will make $16,796. The county’s contribution of $225 must increase by $68 to be in compliance.
• An employee working 35 hours a week at $8.50 an hour will make $15,470. The county’s contribution of $225 must increase by $79 to be in compliance.
Currently, the county has 140 employees participating in its insurance plan. However, by county estimates there are around 325 eligible employees.
Lanier says while the county’s contribution must go up, the cost to the employee will go down and that could encourage some of the nonparticipating employees to change their stance when the 2017 enrollment period opens in October and the cost to the county will be higher than $161,000.
The penalties for noncompliance in offering affordable healthcare to employees is up to $100 a month per eligible full-time employee per offense.
“At least if we’re paying $96 a month in employee benefits, it’s not going out the window in a penalty,” said Lanier. “If we have one employee that goes to the Marketplace and is approved for Marketplace coverage and it comes back that Warren County has not offered insurance affordably to all its employees, they can penalize us $100 per month per eligible full-time employee. For one offense, that’s over $390,000.”
The measure unanimously passed both Budget and Finance Committee and Financial Management Committee. It will now be sent to the full Warren County Commission for its consideration.