health care in the workplace tmi 2014

8/12/2019 Health Care in the Workplace TMI 2014

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Health Carein theWorkplaceDR. ALICE LOUISE KASSENSJOHN S. SHANNON CHAIR OF ECONOMICSROANOKE COLLEGE

ThMa


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Session outline

Sick days and the workplace

Purpose, structure of plans

Pros and cons

Evidence and current research

Status of state, city mandate

PPACA and the workplace

Employer mandate

Details, updates

Information for small busin

Information for self-employ

Individual mandate

Details , updates


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Sick days in theworkplacePURPOSE, STRUCTURE, EVIDENCE, & STATUS OF LAW


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Sick days

Several studies around 2004 brought the issue of paid sick dinto the national spotlight

49% of all workers were not able to take paid sick leave for themor to care for a sick family member (Lovell 2004)

54% of all workers cannot take leave to take care of a sick childwithout losing pay or vacation time (Galinsky, Bond, and Hill 200

83% of workers go to work when sick; 21% of whom do so explicsave their sick days to stay home when their children are sick(ComPsych Corporation 2007)

High wage workers are twice as likely as low wage workers to beto take time off without penalty to care for sick children (ComPsyCorporation 2007)

To address lack of paid sick leave, several localities have taken uppaid sick leave laws (San Francisco one of the first in 2006)


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Sick days

A variety of structures for sick days

State mandated

Paid vs. unpaid

Accumulate vs. use it or lose it

Full time vs. part time workers

Size of business (# employees)

Number of days allowed

Time commitment prior usage ofaccumulated days

Ratio of hours worked to hours earned

Maximum number of hours earned

Type(s) of illness covered

GROUP CHAT

Get into small groups and dsick day structure at your plawork.

Do you have sick days?

Are the paid?

Can you bank days?

Are sick days only for FT wor

(Take note on the incentivesthese items create. We will this issue later in class.)


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Sick days

GROUP CHATAssume that you are the owner of a business and you areconsidering adopting a paid sick day policy.

1) Working alone, make a list of pros and cons of adopting supolicy (including incentives/disincentives created)

2) Team up with two other classmates (assume they are co-owof the business) and share/discuss your lists

3) As a group produce a finalized list that all members agree uWe will share the finalized lists with the class.


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Sick days - paid

Pros

Job and income securityparticularly for low income/wageworkers

Reduction in public health risks

from spread of illness to customers,fellow workers, and other vulnerablepopulations*

Reduced presenteeism, turnover

Improved workplace morale,productivity

Cons

Added employer expens

Reduced hires, increaseunemployment

Difficulties maintaining operations

Abuse of policy


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Sick days definitions

Hall & Gould 2011, pg. 6


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Sick days public health issue

CLASS ACTIVITY1) Read the article by Drago and Miller (2010) Sick at Work:

Infected Employees in the Workplace during the H1N1Pandemic

2) Answer the following questions:

A. How would paid sick days helped reduce the spread of the illneB. What are the costs to employers of having PSD? Of not having?

C. What are the benefits to employers of having PSD?


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Sick days facts

In Handout

See handout forsick days by state

W


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Sick days CT as an example

July 1, 2011 Connecticut became the first state to pass legisrequiring many employers to allow workers to earn paid sick (law took effect January 1, 2012)

Covered many part-time and hourly workers; disproportionatelyaffected

Per diem and temporary workers are NOT covered

Only for employers with 50 or more employees, excludingmanufacturing and nationally chartered non-profits

Earn up to 5 paid sick days per year

Accrue one hour/40 hours worked; can begin to use after 680 hoemployment


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Sick days CT as an example

Sick day benefit can be used to provide wage replacement fo

Employees own illness, injury, health condition, medical appoint

Childs or spouses illness, injury, health condition, medical care

Varity of remedial purposes if worker is a victim of family violencsexual assault

Time to see a lawyer, other legal council


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Sick days analysis from CT

Between June and September 2013 a survey of 251 CT empcovered by the law conducted along with a subsample of onsinterviews with managers (Appellbaum, et al., 2014)

Employers initially concerned about cost and potential abuseprogram; viewed it as anti-business

After enactment, in most cases = modest impact, no impact business operations

Due partially to many carve outs of law; also many businesses coalready offered sick day plan

No indication that has been a job killer (employment grew

covered sectors and actually fell in exempt sectors)


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Share of employers surveyed who offered benefit rose from 8prior to passage of law (at least 5 paid sick days or theirequivalent) to 93.7% in mid-2013

Average number of paid sick days rose modestly over same tperiod from 6.9 to 7.7 days

Large differences across industries by change in proportion oemployees with access to paid sick days

Greatest change in health, education, and social services; retail;hospitality industries

Greater change when union not present


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Appellbaum et al. 2014, pg. 8


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5 minute break


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Sick days thoughts

GROUP CHAT

Do you think that cost increases from sick day policies were evdispersed across businesses?

Of those reporting cost increases, which do you think had thegreater incidence of cost increase? Why?

Size of business? # part-time workers? Etc

Discuss these in small groups and then we will discuss as a cla


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Impact on locality will

depend upon makeup

of labor market,

industry mix

Impact on business

will depend upon

makeup of employeebase, industry

Impact on employees

will depend upon prior

coverage, labor

market status,

industry

What do you

notice?


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Sick days additional analysis

San Francisco passed a city ordinance in 2006First city to

Worker only used 3 of 5-9 sick days available

Parents with PSD > 20% less likely to send a sick child to school

6/7 employers did not report any negative effect on profitability

2/3 employers are supportive of the bill

Drago & Lovell 2011, pg. 3


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What do you

notice?

(also on handout)


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What do you

notice?

(also on handout)


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Sick days

GROUP CHAT - Revisited

Assume that you are the owner of a business and you areconsidering adopting a paid sick day policy.

1) Working alone, make a list of pros and cons of adopting supolicy (including incentives/disincentives created)

2) Team up with two other classmates (assume they are co-owof the business) and share/discuss your lists

3) As a group produce a finalized list that all members agree uWe will share the finalized lists with the class.

Would you change

anything on your list?

Based upon your lists, would you implement a

PSD policy at your business?


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Sick days updates

National Partnership for Women & Families 2014, pg. 1


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Sick days updates

State Size of business PST/work ratio Maximum/yeAlaska 15 or more 1/40 none

Arizona none 1/30 72 hrs/yr

California none 1/30 none

Hawaii none 1/30 9 hrs/yr

Iowa none 5.5/40 144 hrs/yr

Illinois 20 or more 1/40 2 days/yr

Maryland 10 or more

< 10

1/30

1 (unpaid)/30

56 hrs/yr

56 hrs/yr

Massachusetts 10 or more

6-10

< 6

1/30

1/30

1 (unpaid)/30

56 hrs/yr

40 hrs/yr

40 hrs/yr

Michigan 10 or more

< 10

1/30

1/30

72 hrs/yr

40 hrs/yr


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Sick days updates

State Size of business PST/work ratio Maximum/yeNebraska none 1/30 40 hrs/yr

New Jersey 10 or more

< 10

1/30

1/30

72 hrs/yr

40 hrs/yr

New York 10 or more

< 10

1/20

1/20

80 hrs/yr

40 hrs/yr

South Carolina 10 or more

6 - 10

< 6

1/40

1/40

1 (unpaid)/40

56 hrs/yr

40 hrs/yr

40 hrs/yr

Vermont 5 or more 1/30 56 hrs/yr

Washington 250 or more

50 249

5 - 49

1/30

1/40

1/40

72 hrs/yr

56 hrs/yr

40 hrs/yr


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Sick days GROUP CHAT

Connecticut

50 or more employees

1 hour PST/40 hours worked, up to40 hrs/yr

Start using after 680 hours worked

Arizona

All workers

1 hour PST/30 hours wor72 hrs/yr

What are the potential differing experiences by employees in the two states?

What are the potential differing experiences by businesses in the two states?

What are the potential differing labor market outcomes for workers in the two sta

What additional information would you like to know to fully address these questio


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5 minute break


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Employer MandateDIFFERENCES BETWEEN SMALL AND LARGE EMPLOYERS


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Employer mandate overview

Beginning January 1, 2016 employers with 50-99 FTE emplo

MUST offer health insurance that is: Affordable

Offers minimum essential coverage

OR

Pay a penalty

If less than 50 FTE, not penalized if do not offer

This is a delay in the employer mandate; employers with 100more workers begin January 1, 2015

Pay or play mandate


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Employers must provide at least 50% of premium costs of employees heacoverage

Health coverage purchased for an employee cannot exceed 9.5% of theirfamily income for employee only coverage.

Employers must insure their employees if they have over 50 full time worthey will face a penalty or "shared responsibility fee".

The penalty for small businesses not covering their workers is $2000 peremployee and $3000 if they purchase health insurance through the exch

with premium credits The first 30 workers are excluded from the penalty.

High end insurance plans will be subject to a 40% excise tax.

Employers with less than 25 full-time workers making less than $50,000may be eligible for cost assistance via premium tax credits.

Affordability

Penalties


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Minimum essential benefits:

ambulatory patient services;

emergency services; hospitalization;

maternity and newborn care;

mental health and substance use disorder services, includingbehavioral health treatment;

prescription drugs;

rehabilitative and habilitative services and devices;

laboratory services;

preventive and wellness services and chronic disease manageme

pediatric services, including oral and vision care


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E l d l i


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Employer mandate - penalties

Details on the employer mandate from the Chamber of Comm

E l d t lti
https://www.uschamber.com/health-reform/employer-mandatehttps://www.uschamber.com/health-reform/employer-mandate


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Employer mandate - penalties

Determination and application of employer penalty by type of employee

Retrieved from http://www.fas.org/sgp/crs/misc/R41159.pdf 11/13/2013

What types of

incentives might

arise?

E l d t (l th 50 FTE)
http://www.fas.org/sgp/crs/misc/R41159.pdfhttp://www.fas.org/sgp/crs/misc/R41159.pdfhttp://www.fas.org/sgp/crs/misc/R41159.pdf


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Employer mandate (less than 50 FTE)

Choices for small employers:

1. Are not penalized if do not offerpoint employees to indivexchanges (www.healthcare.gov)

2. Employers can buy health insurance from Small Business HOptions Program (SHOP) for 2015 (SHOP opens Nov. 2014)

An online exchange (much like the exchange for individuals)

Could quality for tax credits to offset costs (not permanent); can remainder from taxes

Way of attracting new employeesincreased total compensatio

3. Work with insurance company/broker to buy group coveragprivate market (nothing new)

E l d t SHOP
http://www.healthcare.gov/https://www.healthcare.gov/marketplace/shop/https://www.healthcare.gov/marketplace/shop/http://www.healthcare.gov/


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Employer mandate more on SHOP

Open to employers with 50 or fewer FTE employees

In 2016 this will increase to those with 100 or fewer FTE employ

Self-employed can use individual exchange, but not SHOP

If offer through SHOP, must offer to all FT employees (~30 orhours per week)

In many states, at least 70% of your eligible employees must

enroll in your SHOP plan

Employees sign up using the SHOP webpage after you haveselected a plan

Coverage will not take affect until approved by employer afteenrollment period is over

Emplo er mandate more on SHOP


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Employer mandate more on SHOP

ow to offer your employees coverage through the Federally facilitated SHOP Marketplace in 2014For small businesses in states with a SHOP Marketplace thats run by the federal government, we archanges to make sure that you can take advantage of SHOP coverage and the tax credit as soon as Specifically, for 2014, small employers will enroll their employees in coverage through an agent, broinsurer that offers a certified SHOP plan and has agreed to conduct enrollment according to HHS sta

This process, called direct enrollment, is similar to how most small employers get insurance today.need to apply for SHOP eligibility before enrolling, or to use HealthCare.gov, unless youd like to seeinformation on your plan options, including which insurance companies offer SHOP Qualified Health your area.

The agent, broker, or insurer will enroll your employees, and the SHOP Marketplace will review yourapplication and can determine later whether your business and employees are eligible for SHOP cov

You dont need to wait for the SHOP to determine your eligibility, because it doesnt affect your abilitin a Qualified Health Plan, like the ones the SHOP offers. Even if the SHOP later determines that youeligible to enroll through the SHOP, you and your employees may remain enrolled in your chosen plansmall group market.

The main reason for you to get the SHOP eligibility determination in 2014, is to allow you, to claim thexpanded the Small Business Health Care Tax Credit at the end of your tax yearas long as you also the other requirements for the tax credit.

www.healthcare.govposted November 27, 2013 (online enrollment was delayed with this announcement)
http://www.healthcare.gov/http://www.healthcare.gov/


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Employer mandate (indirect effects)


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Employer mandate (indirect effects)

Uncertainty

When will SHOP be functional?

How much will insurance cost theemployer?

Its all very confusing and it didnt answer mymain questionhow much is it all going tocost? (Washington Post, 11/7/2013)

How much time/money will be spentlearning the system?

If choose to offer and use tax credit, willthe benefit be affordable after creditexpires?
http://www.washingtonpost.com/business/on-small-business/health-care-laws-exchange-problems-leave-small-business-owners-in-a-difficult-position/2013/11/06/4bae4d38-4722-11e3-bf0c-cebf37c6f484_story.htmlhttp://www.washingtonpost.com/business/on-small-business/health-care-laws-exchange-problems-leave-small-business-owners-in-a-difficult-position/2013/11/06/4bae4d38-4722-11e3-bf0c-cebf37c6f484_story.html


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Individual MandateDIRECT AND INDIRECT EFFECTS ON SMALL BUSINESSES

Individual mandate


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Individual mandate

Beginning in 2014, all individuals must by health insurance w

essential benefits (minimum essential coverage)

Self-employed individuals can get health insurance through tstate exchanges just as any other individual

If do not buy health insurance, face a penalty (unless have anexemption)

Penalty is the greater of:

$95 or 1% of household income over the filing threshold in 2014

$325 or 2% of household income over the filing threshold in 201

$695 or 2.5% of household income over the filing threshold in 20

Individual mandate penalty example
http://www.scribd.com/doc/212334311/Hardship-Exemptionhttp://www.scribd.com/doc/212334311/Hardship-Exemption


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Individual mandate penalty example

Suppose you are single and earn

$40,000 per year. The filing threshold for 2014 for single

individual is $10,250

The amount over the threshold is$40,000 - $10,250 = $29,750

1% of this is ~$300

Exchange for a single personage of 49 making $40,000 ocoverage ranging from $120to $1720.90/month (50 optiRoanoke)

All include coverage for docthospital, maternity/newbornpreventative care

Qualify for some aid (cut offalthough Kaiser calculator s

will pay more and not qualifsubsidy

Pay $300 in penalty or at leasper year in premiums (risk of plow since cannot be denied co

sick)

What

would

you do?


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Thank you

Feel free to contact me

Dr. Alice Louise Kassens

[email protected]

(540) 375-2428 (office)

@RnningEconomist

The PowerPoint presentation will beavailable on my blog:

www.therunningeconomist.blogspot.com
mailto:[email protected]://www.therunningeconomist.blogspot.com/http://www.therunningeconomist.blogspot.com/mailto:[email protected]

health care in the workplace tmi 2014

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