Many of us are engaged in a contact sport called “keeping track of your health benefits.” It remains a field with goal posts that move around. Below, I will try to answer some commonly asked questions about the new structure and rules of the Local 802 health fund and the Affordable Care Act (“Obamacare”) – and how they interact.
Q: What recourse do I have to retain coverage if I’m $100 short? I keep falling off and then being reinstated due to the inconsistent nature of my freelance employment status.
A: As of right now, if you get $1,400 in a six-month period, you can self-pay up to the $2,000 level to get to Plan A. This self-pay program is expected to continue through the period ending Feb. 29, 2016, at which time the trustees will evaluate the program. If you fall below $1,400 you cannot self-pay but you might have credits to bank for next time, and you would be eligible for COBRA coverage. Otherwise, you can enroll in an ACA (Obamacare) policy (start at www.HealthCare.gov) and then at least you have consistent coverage. If you choose an ACA plan, the only catch is that you may not be eligible for a federal subsidy during any time where you are also eligible for Local 802’s Plan A. This churning back and forth between Plan A and the ACA coverage is one of the cracks we fall into as multi-employer workers. We have this in common with other entertainment industries and the construction industry. The trustees will be watching to see how many of our members end up in this category.
Q: If I am covered by the Local 802 health plan thanks to two different steady gigs (say, Broadway and the NYC Ballet) plus freelance work, it would seem that my employers are paying “extra” into my health account at the union. I would love this “extra” money to pay for my dependents to be on the Local 802 health plan also. Instead, I still have to come up with an extra $400 a month? Why?
A: It might look like “extra” to you, but in fact the cost of Plan A+ coverage is about $14,000 a year per person, far more than the qualification threshold of $9,000 a year. The gap is even worse for Plan A which costs roughly $12,000 per person, but only requires $4,000 in employer contributions. The premiums help offset that cost, and while you may feel your employers are paying a lot more than is required for you to get the benefits, each person who becomes covered (including dependents) is an additional liability for the fund.
Q: Why are all of my premiums and prescription costs going up? I thought the ACA meant “affordable” coverage.
A: Often the names of laws do not completely reflect what the law does. The aim of the law was to get uninsured people insured, to make sure no one was denied coverage because of being sick and to make sure no one would be saddled with crippling medical bills. Unfortunately, this carries cost. A guarantee that no one will have to pay more than $6,350 in a year out-of-pocket for care ($12,700 for a family) and the guaranteed coverage is expensive. As with all laws designed to level the playing field, there are some winners and some losers. Some folks have affordable insurance for the first time in their lives while others are seeing their premiums rise. Prescription costs are rising for everyone in the nation because new biological drugs are very expensive and their use raises the cost of coverage for everyone.
Q: Why are we paying an increased premium for the same coverage?
A: The coverage is not the same. As mentioned elsewhere, preventive care is now covered 100 percent. Plus both plans now exceed “minimum value” under the ACA. Part of what makes that so expensive is that your out-of-pocket cost for care is capped at $6,350 for an individual and $12,700 for a family. That is a lot of money, but in the old days one catastrophic illness could result in six-figure debt. Once you reach that out-of-pocket cap, the plan pays 100 percent of your medical costs for the rest of that year. Also, hospitalization is now a part of both levels of coverage. Before, it only came with the highest level. Additionally, in the old days there was a yearly cap on benefits. Once you reached that cap (it was $50,000 for the old Plan A) you then were on the hook for all of your medical expenses. Per the ACA, those caps are lifted permanently. Bottom line: the coverage has more value than the old Plan A and Plan A+.
Q: What is MagnaCare?
A: MagnaCare administers the claims for Local 802 health fund. The fund does not buy insurance from MagnaCare. Instead, MagnaCare pays the claims directly from the fund. The fund also uses the MagnaCare network of providers as its Preferred Provider Organization (PPO). If you stay in-network, the cost out-of-pocket is less than if you go outside the network. The hospitalization part of the 802 plan is an insured product, meaning the fund pays a premium to Empire Blue Cross for the coverage as opposed to having the claims paid directly from the fund. The HMO is also an insured product with a yearly premium.
Q: I used to get my regular cholesterol tests done at no cost to me. Now I have to pay for it. Why?
A: Under the old health plan, preventive visits and care were often not covered at all, except for certain women’s preventive health care as required by law. Routine management of ongoing conditions was covered, sometimes at 100 percent. Under the ACA, this is reversed. Most preventive care and screenings must be covered 100 percent and there is a co-pay or coinsurance for ongoing management.
Q: What is the difference between co-pay and coinsurance?
A: A co-pay is a set dollar amount like $20 or $30 for an office visit. Coinsurance is a percentage. For example, if your procedure is covered at 80 percent of “reasonable and customary,” your coinsurance is the other 20 percent.
Q: Why can’t I enroll in the HMO? I thought HMOs saved money.
A: For a while the HMO did save money. The HMO is an insured product, which means the Local 802 fund pays a premium each year for whoever is covered under it. Unfortunately, the HMO has been subject to the same cost increases other insurance has. The state tightly regulates increases in the HMO premiums. Even so, premiums have grown a staggering amount. Even with members paying a much increased portion of the premium, the fund was running a deficit on each member enrolled. Because the other two plans now cover hospitalization and are minimum value, the trustees decided phasing out the HMO would not deny needed basic coverage to anyone.
Q: Why can’t I get a reimbursement of the money put in the fund for me if I am not using the coverage?
A: Under the ACA, only Health Savings Accounts (HSAs) associated with a high-deductible plan can reimburse funds contributed by employers to employees. The intention is probably to discourage employers from offering “bare bones” policies to employees who then may end up inadequately covered.
Q: Why doesn’t the Local 802 health fund have a category of premium for couples rather than only categories for singles and families?
A: The actuary crunched the numbers and found the savings to couples would be insignificant – in other words, it costs almost the same to cover a spouse as to cover a whole family. This is likely because children usually don’t get sick as seriously or as often as adults do.
Q: Previously the fund did not cover annual physicals. Does it now?
A: If it is a preventive annual physical, not a search for the cause of symptoms, it is covered 100 percent in or out of network. No deductible, co-pay or coinsurance.
Q: How can I find a doctor in our network?
A: Start at www.MagnaCare.com and click on “Find a Healthcare Provider.”
Q: Where can I find exactly what the Local 802 health plan covers and some of the plan’s basic documents?
A: Start at www.local802afm.org/health-benefits
Q: I have additional questions not answered in this article. Who do I contact?
A: Call (212) 245-4802 and ask for Local 802’s health department.
HOW THE LOCAL 802 HEALTH PLAN WORKS
For those of you who like numbers and details, here’s a primer on the structure of the Local 802 health fund. The fund gets its income from three sources: employer contributions, participant contributions and premiums and investments. Employer contributions are the largest piece of the pie. Expenses include claims paid out directly for medical services, premiums paid to Empire Blue Cross for the hospitalization and Empire Direct for the HMO, stop-loss insurance (in case there are very large claims), administration and some ACA taxes. Medical claims and premiums to Empire are by far the biggest piece of that pie (over $11.5 million out of about $13.164 million for the plan year ending September 2014). The major medical part of the coverage (non-hospital coverage) is self-insured. This means the medical claims are paid directly out of plan assets, rather than the fund paying a premium to an insurance company for the coverage. MagnaCare administers the claims and we use their network of providers, but they do not insure our members. The hospitalization part of the plan is an “insured product” which means the fund pays Empire Blue Cross to cover each person who is eligible and Empire pays the claims out of its own assets. The HMO is also an insured product whose premiums are tightly regulated by the New York State government. The Prescription Benefit Manager (PBM) administers the prescription claims and categorizes drugs as either non-formulary (the most costly), formulary (less costly) and generic (least costly). A formulary is a list of medications deemed to be the most effective and cost-effective.
Martha Hyde is a multi-woodwind player who performs on Broadway. A member of Local 802, she is also a trustee on the Local 802 Health Benefits Fund. Contact her at EarMar4@verizon.net.