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Health Insurance & Affordable Care Act

Employers Eye Moving Sickest Workers To Insurance Exchanges

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"MES works with [the] reinsurer, insurance carrier and other health management organizations to determine [the] most likely candidates for the program."

Charlotte-based consultant Benefit Controls produced the Managed Exchange Solutions pitch last year but ultimately decided not to offer the strategy to its clients, said Matthew McQuide, a vice president with Benefit Controls.

"Though we believe it's legal" as long as employees agree to the change, "it's still gray," he said. "We just decided it wasn't something we wanted to promote."

Shifting high-risk workers out of employer plans is prohibited for other kinds of taxpayer-supported insurance.

For example, it's illegal to induce somebody who is working and over 65 to drop company coverage and rely entirely on the government Medicare program for seniors, said Amy Gordon, a benefits lawyer with McDermott Will & Emery. Similarly, employers who dumped high-cost patients into temporary high-risk pools established by the health law are required to repay those workers' claims to the pools.

"You would think there would be a similar type of provision under the Affordable Care Act" for plans sold through the marketplace portals, Gordon said. "But there currently is not."

Moving high-cost workers to a marketplace plan would not trigger penalties under the health law as long as an employer offered an affordable companywide plan with minimum coverage, experts said. (Workers cannot use tax credits to help pay exchange-plan premiums in such a case, either.)

Half a dozen benefits experts said they were unaware of specific instances of employers shifting high-cost workers to exchange plans. Spokespeople for AIDS United and the Hemophilia Federation of America, both advocating for patients with expensive, chronic conditions, said they didn't know of any, either.

But employers seem increasingly interested.

"I have gotten probably about half a dozen questions about it in the last month or so from our offices around the country," says Edward Fensholt, director of compliance for the Lockton Companies, a large insurance broker and benefits consultant. "They're passing on questions they're getting from their customers."

Such practices could raise concerns about discrimination, said Sabrina Corlette, project director at the Georgetown University Center on Health Insurance Reforms.

They could also cause resentment among employees who didn't get a similar deal, Fensholt said.

"We just don't think that's a good idea,” he said. "That needs to be kind of an under-the-radar deal, and under-the-radar deals never work," he said. Plus, he added, "it's bad public policy to push all these risks into the public exchange."

Hill, Chesson & Woody is not recommending it either.

"Anytime you want to have a conversation with an employee in a secretive, one-off manner, that's never a good idea," Yates said. "Something smells bad about that."

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Tue, May 06 2014

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