University Times

Thanks to the Affordable Care Act (ACA), also known as Obamacare, Pitt is preparing to offer longer-term temporary workers health insurance and is facing a lot more paperwork in 2015 and beyond.

Those are just a few of the latest changes wrought by the five-year-old law, said Caleb B. Wallace, assistant counsel and senior health policy analyst with UPMC Health Plan, in his March 25 presentation to the University Senate benefits and welfare committee.

“Among developed countries, we spend more, frankly a lot more,” on health care, Wallace noted, and yet “we’re not very healthy. We spend a lot of money and we are not good at getting a lot of value for that money.

“Historically, [insurers] didn’t pay for quality” — how healthy people become or remain, he said. Instead, they’ve been paying for quantity of visits or tests. “If you think about that, in any other business model, it sounds crazy.” The ACA now is encouraging such concepts as working in teams across health care disciplines, and paying for preventive care — moves that are expected to improve the quality of care and decrease costs.

One success of the ACA already, Wallace said, is that “it brought a lot of people into the system, which is a big part of getting it to work.” In addition to the millions of people obtaining  health insurance via the state and federal marketplaces, the law expanded access to Medicaid, which had been optional for states, and which former Gov. Tom Corbett rejected. Gov. Tom Wolf has changed that, making a half-million more people in Pennsylvania eligible for this federal program.

The biggest change brought about by the ACA is the creation of health insurance marketplaces. Among the taxes and fees also created to pay for the ACA, he said, was the so-called Cadillac tax — officially the excise tax on high-value coverage, which will be applied in 2018, and for which the IRS is still devising its rules.

“I’ve been of the belief that we won’t ever come close to the threshold for” this, said John Kozar, assistant vice chancellor for Human Resources and a chancellor’s liaison to the committee. The Cadillac tax, a 40 percent tax on employers that provide high-cost health benefits to their employees, will kick in only if the cost of an employer’s annual premiums on health care plans reach a certain level, he explained after the meeting. It aims “to reduce health care usage and costs by encouraging employers to offer plans that are cost-effective and engage employees in sharing in the cost of care.”

The thresholds for high-cost plans are $10,200 for individual coverage and $27,500 for family coverage. “As it stands today, the University’s annual premiums fall far short of these thresholds,” Kozar said. “Our annual premiums, adjusted for anticipated increases, will be around $6,500 per individual and $17,500 for families in 2018.”

The ACA rules for which part-time employees are offered health care coverage have resulted in “a mixed bag” of decisions among different Pitt schools and departments, Kozar added. Generally, those employees labeled regular employees, as opposed to temporary employees, have been offered health care coverage.

But as of July 1, Pitt intends to offer some temporary employees access to the Basic PPO plan, “if they have consistently worked 30 hours or more per week or if they are anticipated to work 30 hours per week or more for at least 90 days,” he explained after the meeting.

Pitt employees should receive a new IRS Form 1095 in the mail next year along with their W-2 statement, Wallace said. The 1095 is a record of health care benefits given to employees. Wallace also noted that the ACA still is being challenged in the Supreme Court in the King v. Burwell case concerning the tax credits offered by state-run health care marketplaces, which make their insurance offerings affordable. Congress envisioned such state marketplaces as the predominant spot for ACA health insurance purchases, with a federal marketplace only supplementing them, he explained. Instead, the reverse happened, with 36 states relying on the federal marketplace. Since the law says ACA tax credits are available to purchasers of insurance policies offered through marketplaces “established by the states,” this has opened the door for conservative opponents to claim the ACA cannot offer the same tax breaks through the federal marketplace.

Wallace does not expect the ACA challengers to win their case. However, should those who object to the health care act prevail in court, the current tax credits will be disallowed in federal marketplace states, including Pennsylvania. In that case, Wallace expects not only a transition period for those already relying on the tax credits, but also “a lot of creative solutions” to allow the tax credits to stand.

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Quarterly statements from the new sole accounting for TIAA-CREF/Vanguard retirement accounts should be out by the middle of the second week in April, Kozar announced, adding: “The quarterly statement will reflect increased activity.”

Jay Mahoney of TIAA-CREF explained after the meeting: “The quarterly statement from TIAA-CREF will reflect increased activity for a couple of reasons. The transfer of the Vanguard funds onto the TIAA-CREF platform and the movement of most of those mutual funds to a lower expense share class. The Vanguard quarterly statement will reflect the fund values on Feb. 6 and the TIAA-CREF quarterly statement will reflect the fund values as of the market close on Feb. 9. While investment share prices are different on these two days the number of shares you own will be the same. The share class transfer (change) is reflected as a negative transaction for funds transferred out of the current share class and then a positive transaction for the funds transferred back into the new lower share class.”

TIAA-CREF is readying its call center to receive queries about the new statements, Kozar said.

In other committee news:

• The 2015 benefits open enrollment period will be April 23-May 14.

Although rate changes had not received final approvals yet, “it’ll end up being a fairly modest increase,” Kozar said. Enrollment fairs on the lower campus, in Scaife Hall and on the regional campuses are being scheduled.

—Marty Levine