United Methodist historically black colleges and universities (HBCUs) are preparing for upcoming changes associated with health care reform under the Patient Protection and Affordable Care Act, also known as National Healthcare.
On Sept. 9, the General Board of Higher Education and Ministry's Black College Fund Council of Presidents met with the institutions' chief financial officers and human resources directors for a one-day workshop in Nashville, Tenn., with representatives from Educational & Institutional Insurance Administrators Inc. (EIIA) to learn what the new U.S. law will mean for their universities.
"Recognize that there is more than one right answer," said Peter Curtis, vice president of employee benefits at EIIA. "Strategically, it's an opportunity to do something entirely different, and we're here to give you information to change your perspective."
Preparing for change
EIIA and United Methodist HBCUs have a deep history. EIIA was founded in the 1960s specifically to serve HBCUs affiliated with The United Methodist Church at a time when prejudice and fragile financial health placed quality insurance out of reach.
In preparation for the workshop, each of the 11 HBCUs sent their current benefit plans to EIIA to offer each school a one-on-one, detailed assessment to help them plan for compliance with the new law.
Affordable Care Act 101
Under the Affordable Care Act, all Americans who can afford health coverage will be required to purchase health insurance on Jan. 1, 2014, or incur a tax penalty. Consumers will have the option to either purchase health coverage from their employers or shop and compare plans on website exchanges called marketplaces.
The United Methodist Church's Black College Fund supports the largest number of black colleges and universities of any church body in the United States.
About 16,000 students are enrolled in these 11 institutions.
To learn more about these schools, and to support the Black College Fund, click here.
Dependent on income eligibility, citizens may also receive subsidies or gain access to state-funded programs such as Medicaid.
Under the plan, if employers do not offer insurance coverage, they may be fined $2,000 per employee. If they do offer coverage, but an employee decides to opt out and go to the marketplace, the employer may pay $3,000 per employee. While these fines have been delayed until 2015, employers will need to think about the best financial and health benefit choice for their employees beginning in 2014.
According to EIIA, being covered under an employer's plan may cost an employee more out-of-pocket expense.
Determining what's best for everyone
Research indicates that health care costs for higher education employees are among the highiest in the United States. In 2012, the average medical premium per higher education employee was $11,462, and the costs are rising at a rate higher than wage increases.
"Higher education has long held the tradition that the health benefits are very rich," said Curtis. "Those rich plans add to this high premium, as well as the aging population of employees."
During the meeting, the group discussed the implications of steering employees to the exchanges rather than offering health coverage under an employer's plan in order to provide maximum benefit to their employees.
"There is new governmental pressure to control costs, so we have to look at everything," said Dr. Walter Kimbrough, president of the Council of Presidents and of Dillard University in New Orleans. "Health care costs are one of our biggest cost centers. In reviewing the new law, it may be advantageous for both employees and the university for us to not offer health care and have everyone use the exchanges. In fact for some employees they may even get more of a benefit by using the exchanges."
Some around the table expressed concern about a possible backlash and misperception among employees.
"If you don't offer health coverage, it might be perceived as a discrimination of status, and it could cause a wide division," said Chris Newton, director of human resources at Philander Smith College in Little Rock, Ark. "I think each school is going to be different."
Oct. 1 deadline
The delay in tax penalties is giving schools longer to prepare.
"Delays mean you don't have to worry about fines for 2014, but it gives you more time to think strategically for 2015," said Curtis. "Don't stop. Keep going, but realize that you have more time to make decisions."
Each institution has until Oct. 1 to notify employees that changes will be occurring under the new law.
For more information about the Affordable Care Act, go to healthcare.gov.
*Bannon is a public relations specialist at United Methodist Communications in Nashville, Tenn.