The Free Press, Mankato, MN

February 6, 2013

Benefits adviser warns employers about big health care decision

By Tim Krohn
Free Press Staff Writer

ST PETER — If you’re an employer responsible for deciding the future of your employees’ health plans, Christopher Schneeman suggests you don’t plan a summer vacation.

“Block out all of July and August,” said Schneeman, president of Seven Hills Benefit Partners, an independent benefits advisory firm in St. Paul.

That’s when mountains of details are to come out regarding the new Health Insurance Exchange and rules surrounding the federal health care reform laws.

The new laws and exchange mean businesses may opt to stop providing health insurance to their employees, but it’s not yet entirely clear what the financial and other ramifications might be if coverage is dropped. There may be penalties for dropping coverage or subsidies — at least for small businesses — that offer coverage.

“It’s a big deal,” said Schneeman, who spoke at a forum in St. Peter Wednesday.

The insurance exchange being set up by the state, with rules being finalized by the Legislature, will be the place individuals go if they need to purchase health insurance or if they participate in publicly funded health care. (Currently almost half of all Americans are covered with government-funded health care.)

Nearly 25 percent of Minnesotans, or about 1.3 million, are expected to buy private insurance from the new exchange.

Schneeman said the big decision that needs to be made by the Legislature and governor is what role the state will take in the exchange. The state could choose to be more active by pressuring private insurance companies and health care providers to offer plans that are lower cost. Or, Schneeman said, the state could act like the website Expedia, which doesn’t help set airline ticket prices but has information on all the prices and helps individuals find the deal that fits them best.

The state legislation must be approved and submitted for federal review by March 31. The key committee chair helping craft the rules is Sen. Kathy Sheran, DFL-Mankato.

Schneeman said that more than half of all Minnesota businesses have not yet decided if they will continue helping pay for employee insurance or whether they will drop it or turn to a defined-benefits plan. With defined benefits, employers would give employees a certain amount of money each month and employees would use it to help pay for private insurance on the health exchange.

He said health reform also is putting financial pressure on health providers, leading to more consolidation and pushing them to do better in showing they get good results for the money spent.

The exchange and health reform also will give rise to more health providers — such as Allina — offering insurance plans of their own. “The new law allows them to take on risk, which basically makes them an insurance company.”