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PPACA: Health and Welfare Plans Get What Labor Wished For

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Organized labor lobbied hard for passage of the Affordable Care Act, and now union health plans are getting ready to implement some of the major provisions.

Michael Jordan, a senior vice president at MagnaCare Holdings Inc., Garden City, N.Y., talked about the effects of the Affordable Care Act — the legislative package tht includes the Patient Protection and Affordale Care Act (PPACA) — recently during a MagnaCare PPACA symposium.

Symposium presenters developed a detailed Affordable Care Act implementation timeline and a detailed analysis of Affordable Care Act taxes and savings for the symposium, and speakers talked about many general implementation issues, such as what the government will be expecting from employers. One speaker predicted that implementation is likely to proceed at least until 2012, even if Republicans end up winning control of Congress in November.

Jordan focused on Taft Hartley health and welfare funds — multiemployer plans administered by boards that include representatives of labor and management.

Many unions spent years lobbying for some of the provisions in the Affordable Care Act, such as provisions that are supposed to make subsidized coverage available to low-income, uninsured workers on a guaranteed-issue, mostly community-rated basis starting in 2014.

Actually implementing the Affordable Care Act could be as challenging for health and welfare plans as for other types of employer plans, and the managers and trustees of many of the health and welfare plans may prefer to maintain “grandfathered status” as long as possible, to avoid the effects of many act provisions as long as possible, Jordan said.

“Unemployment is high,” Jordan said, according to a written version of his presentation. “For Taft Hartley funds this translates into decreased contributions.”

Contributions are falling faster than utilization, and reserves are at historic lows, Jordan said.

Health and welfare plans should follow the example of ordinary employer plans, by doing more to encourage enrollees to seek care in-network, and by implementing medical management and wellness programs, Jordan said.

In the long run, Jordan said, Taft-Hartley plans will have to turn to fraud detection programs, disease management programs, wellness programs and plans that incorporate health reimbursement arrangements or other types of health accounts, Jordan said.


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