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Re: Delta Air Lines:
Posted by **pycb** on Aug 25, 2013 at 10:24:19 AM:
In Reply to: Re: Delta Air Lines: posted by **fishamaphone** on Aug 25, 2013 at 4:38:26 AM:
**********Next Year, Our Health Care Costs Will Increase By 'Nearly $100 Million'
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**********We know that Obamacare will significantly increase the cost of individually-purchased health insurance in nearly every part of the country. But we’ve generally assumed that disruptions in the market for employer-sponsored health insurance will be less severe. In particular, large employers who self-insure should be exempt from most of Obamacare’s most onerous regulations. It turns out, however, that even America’s largest companies face higher costs due to the health law. A recently-leaked letter from Delta Air Lines to the Obama administration states that the “cost of providing health care to our employees will increase by nearly $100,000,000 next year,” much of it due to Obamacare.
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**********Executives from several large Atlanta-based companies met with a member of the Obama administration in Atlanta in early June. There, the executives explained to the administration official how Obamacare was affecting their businesses. Robert Kight, Delta’s vice president for global human resource services and labor relations, wrote a follow-up letter to the official, detailing Delta’s concerns. Apparently, Delta then circulated the letter among its employees, who then sent it to Erick Erickson of RedState.com. The full text of the letter is appended to this article.
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**********“Make no mistake,” writes Kight. “The costs imposed on Delta and our employees are very real and they are escalating. [Obamacare’s costs], when combined with normal medical inflation and the end of the [Early Retiree Reinsurance] program mean that the cost of providing health care to our employees will increase by nearly $100,000,000 next year.”
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**********Self-insurance vs. normal insurance
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**********It’s important understand how self-insurance works. Traditional insurance works this way: you and others pay premiums to an insurance company. The insurance company collects those premiums, and pays for the contracted-upon health expenditures incurred by you and other policyholders. The insurer keeps an additional amount of money in reserve, in case the amount it has to spend on health claims exceeds what it collected in premiums. The insurer has overhead expenses—let’s say 15 percent of premiums—which include its labor costs and perhaps a small profit margin.
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**********Self-insurance works a different way. Many large employers, instead of paying premiums to an insurance company, cut out the middleman and pay directly for the health costs that their workers incur. This involves additional financial risk for the employer, but the company saves money that would otherwise go to an insurer’s overhead.
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**********And there’s an additional benefit. Under Section 514 of the Employee Retirement Income Security Act of 1974, or ERISA, companies who directly fund their workers’ health benefits, instead of purchasing health insurance on their behalf, are not bound by state insurance regulations. Because state insurance regulations often act to drive up the cost of health insurance, many companies—especially large ones with a broad risk pool—are better off if they self-insure their workers.
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**********ERISA plans are also exempt from a number of Obamacare’s regulations. But the new health law does impose a number of mandates on self-insuring employers. Firms with more than 200 full-time workers must “automatically enroll new fulltime employees in one of the plans offered.” ERISA plans must pay a fee to fund “patient-centered outcomes research” and cover a number of mandated health care services. Their ability to install annual or lifetime limits is constrained, as is their ability to expand deductibles, co-pays, and other cost-sharing mechanisms.
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**********Several Obamacare provisions are increasing Delta’s costs
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**********The Delta letter specifies a number of Obamacare provisions that are increasing their costs. The law charges Delta a “reinsurance fee” that goes toward funding the law’s subsidized insurance exchanges. But Delta employees get coverage from Delta, not from the exchanges; hence, the fee is effectively a $10 million tax on Delta for other government purposes.
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**********The oft-noted provision of the law that requires employers to cover “adult children” up to the age of 26 has also driven up Delta’s costs, according to the letter. “More than 8,000 children [have been] added to our rolls resulting in a permanent increase in our overall costs of about $14 million per year.” According to Delta, these added children have higher-than-average health costs, which has had the added effect of increasing premiums for other employees.
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**********In addition, the individual mandate—the provision in the law that requires most individuals to purchase health coverage—means that a number of Delta employees who turn down the firm’s offer of coverage will now accept it. That will add another $14 million to Delta’s costs.
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**********Delta doesn’t like Obamacare’s “Cadillac tax” on high value insurance plans. But that’s because the tax is doing exactly what it should do: motivating employers to pare down on costly plans that drive premiums upward.
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**********Delta says that its health care costs will increase by $100 million next year. That’s a staggering sum, even for a large company like Delta. It’s not clear exactly how much of that sum is due specifically to Obamacare, and how much is due to health inflation and the end of Obamacare’s Early Retiree Reinsurance Program, a $5 billion fund used to encourage employers to continue providing health benefits to early retirees in the near-term. But the three provisions described above amount to $38 million, and that doesn’t include increased cost of insurance due to Obamacare’s benefit mandates, which should amount to a significant additional sum.
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**********Regulatory uncertainty is a significant problem
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**********The letter also complains about other aspects of the law, such as the employer mandate, which “may unnecessarily impose HR information systems changes that will be costly to build and maintain” due to their complexity. “There are many unsettled principles surrounding this provision of ACA,” Kight writes, “and based on the fact that it is already June, employers will not have time to react should final regulations be issued this year. This puts employers at risk of being assessed these penalties in innocent situations (such as when employees take voluntary leaves of absences) and imposes additional costs, even in those situations where the vast majority of employees are offered affordable, comprehensive coverage.”
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**********This is one of the most problematic aspects of Obamacare: the fact that the Obama administration has missed dozens of deadlines to issue important regulations related to the law. Employers sit around waiting for these regulations to drop, knowing that they must reorganize their businesses to comply, or pay steep penalties. But as the clock ticks, and we get closer to 2014, companies have less and less time to adapt to new regulations, increasing the potential for disruption and higher costs.
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**********President Obama keeps insisting that, “for the 85 percent of Americans who already have health insurance,” life will be even better than it is today. But that’s patently untrue. The so-called “Affordable Care Act” will make health care less, not more, affordable.
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**********and just WHO do you think is going to pay for it?
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*********That's one way to look at it. What is $100 million? Two or three airplanes?*
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********that's $100 million ON TOP OF what they are already paying
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********* What is the cost of personnel who have no health insurance? *
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********of course you failed to actually read & absorb the article...
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********Delta Employees already have health coverage - it's the Obamacare mandates that causing their already existing healthcare premiums to skyrocket
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*********That costs money too. If I had a choice of going to work for an employer who provided or helped provide health insurance vs one who didn't, which one do you think I'd choose? The cost of hiring/training/mentoring new employees is very high. And if you're getting the also-rans who couldn't find a job at a more prestigious company -- one that provides employee benefits -- then there will be performance problems, don't kid yourself.
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*********Let me ask you this: do YOU have health insurance?*
********For at least the next year - than I go on Medicare at which point I will need to take out a supplemental plan.
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********* Do YOU have to worry about the cost of your next illness/treatment/operation? I'm guessing you do. Most people who are opposed to "Obamacare" are sitting pretty when it comes to their own circumstances. They just don't give a shit about anyone else.*
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********See my previous reply regarding my move to Medicare in the next year. In that context - Yes. I am concerned. I don't want Obamacare to inflate the cost of that Supplemental Plan to the point where it becomes a burden.
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********The law is GARBAGE & should be scrapped - it is failing what Healthcare reform SHOULD be doing - DRIVING COSTS DOWN - in fact it is doing just the opposite - Healthcare costs have already increased in the past year by 29% as some of the provisions of Obamacare where out in place - once it is fully implemented it is estimated that the Premium increases could easily match that.
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********FOR YOUR READING PLEASURE:
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********UPS to drop 15,000 spouses from insurance, cites Obamacare
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********University of Virginia Slashes Health Benefits Due to ObamaCare
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********Major Health Insurers Abandon ObamaCare Exchanges
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********'Affordable' Care: $1 Pay Hike Costs Middle-Class Family $9,355 Hike in Premiums
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********you (not you in particular) have to be delusional to believe that Obamacare is going to bring affordable healthcare to all
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*******What do you think is a viable alternative?*
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******something that actually reduces costs not simply treats the symptoms of those high costs & that is not Federally controlled........
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******I had posted a rather lengthy bit concerning what I thought a better alternative might be around 2 years ago when this first started coming up. I had saved it as a WORD document in case I might need it again. That was on an older computer & has since gone missing. I have no intention of attempting to rewrite.
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******Suffice it to say - if both Houses of Congress (Democrats & Republicans) have decided to opt out of this plan (and they have) - you know it sucks.
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*****What do you mean both houses of Congress have opted out of this plan?*
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****they petitioned for & received a waiver - look it up
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***For their own personal coverage? Is that what you mean?
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***Of course they've opted out!!! sheesh members of Congress have the most deluxe health care and retirement benefits imaginable! I'd opt out too!
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***Problem is, most Americans aren't members of Congress. So it's a pointless argument.
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**who's arguing?
**do you naturally just assume that if someone is in disagreement it must be an argument?
**no wonder this board collapses into the nonsense it does
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**The law as initially written required that ALL Federal employees should live under the same rules that they are forcing on everyday Americans. In other words - instead of the tax payers picking up 75% of the tab - they would become responsible for their own healthcare costs through the exchanges (which every major provider appears to be excluding themselves from).
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**However - once the costs became known they went to the Whitehouse & requested an exemption from the law as written. (Surely another example of the "We have to pass it to see what's in it" syndrome where laws are voted on with no one actually reading what it is they are voting for).
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**In other words - they also realized (once they actually read it) that the Bill sucked & was going to drive their costs higher as it will for every other American.
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**So instead - all Federal employees will now keep their current coverage subsidized by (come on - let's say it together) YOU & I.
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**They knew it sucked.
**Which I believe was my original point.
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*The purpose of ACA is to provide a safety net below which no American can fall. The plan was never designed to lower insurance standards on any employee, government or private, so I'm somewhat dubious of your description here. Can you cite a source that describes the ACA, at any point, in the way you do here?*
you men besides the title of the Bill itself (Affordable Healthcare Act)?
Title I. Quality, Affordable Health Care for All Americans
This Act puts individuals, families and small business owners in control of their health care. It reduces premium costs for millions of working families and small businesses by providing hundreds of billions of dollars in tax relief – the largest middle class tax cut for health care in history. It also reduces what families will have to pay for health care by capping out-of-pocket expenses and requiring preventive care to be fully covered without any out-of-pocket expense. For Americans with insurance coverage who like what they have, they can keep it. Nothing in this act or anywhere in the bill forces anyone to change the insurance they have, period
Americans without insurance coverage will be able to choose the insurance coverage that works best for them in a new open, competitive insurance market – the same insurance market that every member of Congress will be required to use for their insurance(except of course they opted out). The insurance exchange will pool buying power and give Americans new affordable choices of private insurance plans that have to compete for their business based on cost and quality.
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As I said - Healthcare Reform is needed to reduce costs - this doesn't do that..............
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Last updated on Aug 25, 2013