Michael Parr is an employee benefits agent with NorthWest Insurance Agency, a subsidiary of George Petersen Insurance Agency.
He started a 20-year business career at Oracle Corporation in various technical support and sales management roles in the Bay Area and Boston. Following Oracle, he became an employee benefits broker for a large agency in New England, handling clients throughout the East Coast. In 2008, he returned to California, where he joined NorthWest.
His focus is on business clients using his extensive industry knowledge of employee benefits in health, dental, life and disability products.
Q: Now that health reform is here to stay, what should companies be planning for and what can they expect, in terms of health care costs and overall impact on their workforces?
Mr. Parr: It will require more administration by upper management, HR, and office management. Specifically, W-2 reporting, distributing summary of benefits and medical loss rebates, provide written notices to employees about the exchanges and subsidies available, adjust waiting periods and Medicare taxes, to name a few.
In terms of health insurance costs, I unfortunately do not see much in the health care reform bill that will help reduce employer’s costs significantly for Group Health Insurance coverage unless tax incentives are broadened/increased.
Q: Much has been made of the notion that companies will be incentivized to drop employer-sponsored health coverage with the health insurance exchanges coming on line. Is this still a possibility or is it hype? What might incentivize employers to keep health benefits in place, particularly small to mid-sized business?
Mr. Parr: Hopefully there will continue to be tax incentives for small business employers to provide group health insurance to their employees, and those guidelines for eligibility will be broadened in the next administration. Also, if the economy improves, employers, like in the past, will need to offer a rich benefits program — not just health insurance — to attract new employees to remain competitive in the marketplace.
Q: If employers do drop their plans, will the exchanges and other elements of health care reform be enough to provide comprehensive health coverage for individuals?
Mr. Parr: Remains to be seen, especially in regards to affordability. Preexisting conditions are no longer an issue as far as obtaining individual health insurance. More people will be insured but I am still not hopeful that this will make health insurance less costly or more affordable for companies and individuals (more sick individuals in the pool, etc.).
Q: The federal government recently said it would roll out two nationwide health insurance plans in every state, as a means to keep costs down and expand access. Will that plan be effective in containing costs?
Mr. Parr: I don’t believe so but it may in that the existing state carriers may have to reduce their premiums to remain competitive with these nationwide health insurance plans.
Q: Does California’s exchange contain adequate, too much or not enough “essential health benefits” in order to be a successful augmentation — or perhaps replacement if companies drop coverage — to the current mix of employer-sponsored coverage and public health programs?
Mr. Parr: From various in-person and web conferences I’ve attended, the presenters have stated that the only difference between the exchanges and the direct health insurance market is that the direct market will have more carrier plans available.
The only difference with the exchange is there will be “subsidy calculators” available to see if your business or you as an individual are eligible for a government subsidy to make health insurance more affordable. Health insurance rates and broker commissions will most likely be the same in the exchange as they are on a direct basis.
This being the case, I think it is a big waste of time and millions of dollars to build these exchanges.
Q: Anything you care to add?
Mr. Parr: One of ways I believe we could significantly reduce health insurance costs in our country would be to have a mandate by federal and/or state governments requiring electronic medical records for every U.S. citizen. This would reduce billions of dollars in cost and waste in the health care industry, and ideally and most likely reduce health insurance rates significantly. Kaiser is doing this very effectively currently.
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