Obamacare, increased health costs, disappearing 401k?

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xiosen
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Obamacare, increased health costs, disappearing 401k?

Post by xiosen »

Hello all,

My GF just received a letter from her employer that sounds like they are essentially removing the 401k matching and using obamacare as a scapegoat. I am really concerned about these changes since she just started working for this company and has yet had a chance to contribute to the 401k. It also sounds like the heathcare costs are nearly doubling. Is this a similar trend across all your companies? What do you suggest she do?

Part of the email below:
There has been a lot of discussion in the media about the Affordable Care Act (ACA), otherwise known as Obamacare. Over the past several months, it’s likely that you’ve seen news stories profiling various companies facing rising employee premiums and making tough decisions in order to combat the escalating healthcare costs. As a large employer, [Company] and its affiliated companies, [Company], are not exempt from these challenges. However, through countless hours of diligent research and strategic planning, our benefits team has found solutions which will allow us to provide our employees with high quality health insurance plans at an affordable cost. We have also taken into account the results of the health insurance survey we conducted earlier this year in order to further improve your coverage options for 2014.

While this is certainly good news, it does not mean that [Company] hasn’t been impacted by the rate increases and fees levied under the ACA. As we began to prepare for the changes in the coming year, we were forewarned that our increase in total healthcare costs could be upwards of 40%. Through negotiations, our final rates came in better than anticipated although we will still be paying several hundred thousand dollars in additional rate increases over last year. As a result, there will be some changes taking place next year, so please review this letter and your forthcoming open enrollment documents in order to pick the plan that best suits your needs.

In 2014 [Company] will still offer health coverage through Blue Cross Blue Shield. One of the most frequent comments that we received in the employee survey was that you wanted more choices for healthcare coverage. Therefore, in the upcoming open enrollment period, you will have increased options. There will be two PPO (Preferred Provider Organization) options and two High Deductible Options with an HSA (Health Savings Account).

For employees who choose one of the High Deductible HSA plans, [Company] will make a monthly contribution to your account. While the amount is lower than what we were able to provide last year, it is still highly competitive. According to the Kaiser Family Foundation, the average employer contribution to an HSA is $653/year for single coverage and $1,150/year family coverage. For the HSA $3000 deductible plan, [Company] contribution will be in line with those numbers for the employee only plan and will be above average for the employee + spouse, employee + children, and family plans. For the HSA $5000 deductible plan, [Company] will offer contributions well above the national average for all coverage levels.

Another change in 2014 will be the addition of a spousal surcharge. If an employee’s spouse is offered health insurance through his or her company, but chooses not to take it and enroll on our plan, a $50 surcharge will apply per pay period. The employee surcharge is a provision that has become more common with the introduction of the ACA. Companies including UPS, Xerox and other top organizations have implemented similar policies in order to keep employee healthcare plans affordable.

Another part of our effort to manage increasing costs, [Company]’s 401k matching program will also work differently in 2014. The employer match will no longer be automatic; rather it will be discretionary, as it will be based upon company performance and funded upon board approval at the end of the year.

Dental, vision and disability coverage are not affected by the ACA. The rates for these plans have remained the same or decreased slightly and will remain with Guardian.

While the cost of employer-sponsored healthcare plans has risen, the goal of the ACA is to ultimately bring down costs by encouraging us to take a more active role in our healthcare decisions. In essence, it’s prompting us to become conscientious healthcare consumers. As we prepare to head into open enrollment, knowledge is power. The more educated you are about the options and choices in 2014, the easier it will be to minimize your out-of-pocket expenses and maximize the benefits you receive from each plan.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by jebmke »

If I recall, this is something that was done years ago by my company. It was an amendment to the plan that allowed the board to eliminate the match during economic downturns. Most years, the board approval of the match was perfunctory. They did suspend the match in 2008-09 (after my time). That said, in your case, the way they have wedged in the notification, it does appear to be an attempt to connect the move to the ACA.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Grt2bOutdoors »

One more way for the employer to cut it's compensation expense and tieing it to company performance, rather than say - we're unable to grow revenues, therefore we have an "ace card" we will hold in reserve. If the company meets its performance targets, you get the match, otherwise you get the shaft.
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Garco
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Garco »

No cost changes for me, since my company covers it all via Blue Cross.

My daughter just signed up for an ACA exchange in NYC for the "platinum" level plan (includes optometric and dental, no copays). She's going to be paying $200 LESS per month than under her current COBRA, which had less coverage.

I think the situation for individuals living in different places differs a lot. Some people have "basic" coverage now that really isn't very good -- but they're "covered," they think, until they're not. The new rules regarding things such as no exclusions for pre-existing conditions mean that insurers have a pool that has more higher cost individuals in it. But if the ACA exchanges work right and get large enrollments from healthy as well as infirm people, the costs should balance out and on net and on average people will be better off.
beachplum
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Re: Obamacare, increased health costs, disappearing 401k?

Post by beachplum »

Instead of your wife's company subsidizing their HSA accounts, why don't they use that money towards matching 401k's. On my husband's HSA family plan the deductible is 4800 and then 100% is covered for that year. His company does not give him any extra money, but keeps the premium around 50 a month. the 401k match has not been affected. All of this is as of today, and health insurance open enrollment will soon be here, but my guess is that things will be a tad higher but not because of the ACA.
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xiosen
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Re: Obamacare, increased health costs, disappearing 401k?

Post by xiosen »

Garco wrote:I think the situation for individuals living in different places differs a lot. Some people have "basic" coverage now that really isn't very good -- but they're "covered," they think, until they're not. The new rules regarding things such as no exclusions for pre-existing conditions mean that insurers have a pool that has more higher cost individuals in it. But if the ACA exchanges work right and get large enrollments from healthy as well as infirm people, the costs should balance out and on net and on average people will be better off.
I am in the same boat. I have a "basic" high deductible plan now and I don't really truly know what is "covered." Does anyone ever truly know until its to late? Although my plan right now is cheaper then the ACA counterpart (~$90 vs $140), I did receive a letter saying that due to the ACA, they will raise the premiums considerably (conveniently, the exact figure is unknown until the enrollment period for ACA is closed). So I am leaning towards paying more with an ACA plan just because it seems more transparent and accountable about what is covered then what I have now. Aside from the price difference, did your daughter notice any other differences between the plans?
beachplum wrote:Instead of your wife's company subsidizing their HSA accounts, why don't they use that money towards matching 401k's. On my husband's HSA family plan the deductible is 4800 and then 100% is covered for that year. His company does not give him any extra money, but keeps the premium around 50 a month. the 401k match has not been affected. All of this is as of today, and health insurance open enrollment will soon be here, but my guess is that things will be a tad higher but not because of the ACA.
All very good questions. I think the ACA is just the perfect excuse to make some drastic changes and get away with it. I feel the problem could be solved in many difference ways but yet here we are, 40% price increases, and the threat of pulling 401k matching. Other employees just blame Obamacare because it was lumped in with the announcement as the implied cause, and still no one appears upset by the email.
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Epsilon Delta
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Epsilon Delta »

Sometimes management will use any excuse. Once my bosses-bosses-boss blamed missed income targets (and bonuses) on the Iranian revolution for 5 straight years.
Andyrunner
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Andyrunner »

ACA has increased workload for benefit departments requiring them to hire more employees and manage more data for ACA compliance. So that is probably why they are cutting the 401k match, to offset that loss (on top of rising insurance costs). Although I have not heard companies taking away 401k matches because of ACA, I have heard of the surcharge on the spouse becoming more common.
Quickfoot
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Quickfoot »

Previous to 2014 we had a $250 deductible, no office co pay, $10 prescriptions, and 90% co-insurance. For 2014 we get $1250 deductible, 80% co-insurance, $45 office visits $25-$45 prescriptions and they are refusing to cover spouses if the spouse has other coverage available, all because of the "Affordable Care Act." The majority of employers have cut or are planning to cut benefits or increase employee cost due to ACA.
I think the ACA is just the perfect excuse to make some drastic changes and get away with it
Not really, ACA is a game changer and is making them make the changes that makes health insurance far more expensive so they are having to increase employee burden and decrease benefits. They also are taxed for each person they insure which is leading companies to stop covering spouses (especially since spouses cost employers more than the actual employee anyway).
Last edited by Quickfoot on Tue Nov 05, 2013 1:32 pm, edited 3 times in total.
manwithnoname
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Re: Obamacare, increased health costs, disappearing 401k?

Post by manwithnoname »

Epsilon Delta wrote:Sometimes management will use any excuse. Once my bosses-bosses-boss blamed missed income targets (and bonuses) on the Iranian revolution for 5 straight years.
ED:
You don't seem to be knowledgeable of how a business is run. Every employer's business model projects how much of total income it will spend for employee costs including salaries, bonuses, benefits, worker's comp, etc. In the financial services industry 50% is the benchmark. If one benefit/HR cost goes up, such as health care then other costs such as 401k contributions, employee comp must go down.

The employer is trying to reduce health costs in other ways such as excluding spouses who are eligible for health care from their own employers.

Employer is not saying there will be no 401k match- it will now be made at the end of year so that the employer will save the match on those employees who leave before year end.

In a stagnant economy where GDP is growing by less than 2% employers have to cut costs everywhere. If the employer doesn't get enough savings from benefits costs, next step is fewer workers.

Welcome to the New Economy.
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Hub
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Hub »

According to the Kaiser Family Foundation, the average employer contribution to an HSA is $653/year for single coverage and $1,150/year family coverage. For the HSA $3000 deductible plan
I found this part interesting. My employer will contribute $250 for an individual's HSA and $500 for a family in 2014 down from $500/$1000 each of the past two years.

This is annoying as it seems each year they slightly reduce benefits. Obviously it's their prerogative to get away with paying as little as possible, but I can taste this s sandwich of eroding benefits and it's a flavor I will remember.

On the upside they blamed the ACA for dramatic increases in medical insurance each of the past few years so it only went up 3% this year.
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Hub
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Hub »

manwithnoname wrote: Employer is not saying there will be no 401k match- it will now be made at the end of year so that the employer will save the match on those employees who leave before year end.
My employer has the same language regarding the annual approval of the 401k match by the board of directors. They've never not matched it, even in 08-09.
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xiosen
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Re: Obamacare, increased health costs, disappearing 401k?

Post by xiosen »

Quickfoot wrote:Previous to 2014 we had a $250 deductible, no office co pay, $10 prescriptions, and 90% co-insurance. For 2014 we get $1250 deductible, 80% co-insurance, $45 office visits $25-$45 prescriptions and they are refusing to cover spouses if the spouse has other coverage available, all because of the "Affordable Care Act." The majority of employers have cut or are planning to cut benefits or increase employee cost due to ACA.

Not really, ACA is a game changer and is making them make the changes that makes health insurance far more expensive so they are having to increase employee burden and decrease benefits. They also are taxed for each person they insure which is leading companies to stop covering spouses (especially since spouses cost employers more than the actual employee anyway).
I get your argument that employers state the reason for the adjustments is because of the ACA. However, I am still not convinced that the sole purpose for ALL of these changes is due to the fact that ACA makes it far more expensive. I personally feel sneaking the 401k announcement in with the Obamacare is expensive message gives the implication that Obamacare is the exact reason they did it when in reality they have probably had this planned for some time.

Do you think that no other options exist to maintain benefits even with increased costs in healthcare? Can the yearly budget be allocated differently to still reach company goals and provide the same benefits? What about all the employers that are not cutting benefits even with the increased cost, how are they doing it? I feel like there has to be a better way then whelp costs are up, your benefits are down.
dad2000
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Re: Obamacare, increased health costs, disappearing 401k?

Post by dad2000 »

I am on committees that review both our corporate 401K and healthcare plans. Both are reviewed at least annually.

Though we did have to change our health care plan this year, we maintained roughly the same benefits, and the costs were kept about the same. In fact, the costs went down for some people. Really, it was no different than in previous years, and the ACA had no material impact. So while I can't speak to OP's situation, it is NOT universally true that ACA caused healthcare premiums to rise for all employers.

Our 401K match has always been discretionary, and always depends on company performance. I don't think that's unreasonable.

From what I've seen in the marketplace, I do believe that some companies will use the ACA as a scapegoat to cut employee benefits. No different than some poorly performing CEOs trying to blame earnings on the sequester or shutdown rather than their own performance. Of course, we don't know what's behind the message at OP spouse's employer.
Quickfoot
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Quickfoot »

Do you think that no other options exist to maintain benefits even with increased costs in healthcare? Can the yearly budget be allocated differently to still reach company goals and provide the same benefits? What about all the employers that are not cutting benefits even with the increased cost, how are they doing it? I feel like there has to be a better way then whelp costs are up, your benefits are down.
It depends on the company, non profits are less likely to cut benefits. Companies that are in business for a profit whether public or privately owned are going to pass at least some of the cost on to the employee and rightfully so. Most employers don't want to cause attrition to rise but they also have a responsibility to their employees to stay in business, paying for benefits they can't afford is counter to the interests of the owners of the company as well as the employees.

There is no free lunch, people that pushed for ACA to be passed should have been aware companies wouldn't just not make a profit to pay the increased costs. They will now hire less people, hire more part time employees to avoid paying benefits and increase outsourcing through contractors (even if the work remains onshore) and find other ways to manage their benefits expenditures.

Companies have few options for managing costs,

#1 sell the product or service for more, this only works if there are no competitors trying to undercut them and if people are willing to pay more
#2 share the cost with the employee
#3 cut benefits
#4 reduce # of employees

#2, #3 and #4 are far more likely than #1 because if the company could sell the product for more they would already be doing so.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by manwithnoname »

Hub wrote:
manwithnoname wrote: Employer is not saying there will be no 401k match- it will now be made at the end of year so that the employer will save the match on those employees who leave before year end.
My employer has the same language regarding the annual approval of the 401k match by the board of directors. They've never not matched it, even in 08-09.
Maybe you should change employers and work for one that makes discretionary matching contributions..
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Re: Obamacare, increased health costs, disappearing 401k?

Post by manwithnoname »

xiosen wrote:
Quickfoot wrote:Previous to 2014 we had a $250 deductible, no office co pay, $10 prescriptions, and 90% co-insurance. For 2014 we get $1250 deductible, 80% co-insurance, $45 office visits $25-$45 prescriptions and they are refusing to cover spouses if the spouse has other coverage available, all because of the "Affordable Care Act." The majority of employers have cut or are planning to cut benefits or increase employee cost due to ACA.

Not really, ACA is a game changer and is making them make the changes that makes health insurance far more expensive so they are having to increase employee burden and decrease benefits. They also are taxed for each person they insure which is leading companies to stop covering spouses (especially since spouses cost employers more than the actual employee anyway).
I get your argument that employers state the reason for the adjustments is because of the ACA. However, I am still not convinced that the sole purpose for ALL of these changes is due to the fact that ACA makes it far more expensive. I personally feel sneaking the 401k announcement in with the Obamacare is expensive message gives the implication that Obamacare is the exact reason they did it when in reality they have probably had this planned for some time.

Do you think that no other options exist to maintain benefits even with increased costs in healthcare? Can the yearly budget be allocated differently to still reach company goals and provide the same benefits? What about all the employers that are not cutting benefits even with the increased cost, how are they doing it? I feel like there has to be a better way then whelp costs are up, your benefits are down.
There is a better way than to reduce benefits when costs go up and that's to generate more revenue equal to the increased health plan costs which isn't happening in the low growth economy where GDP growth is less than 2%.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by schwarm »

Garco wrote:No cost changes for me, since my company covers it all via Blue Cross.
No changes where I work, other than a surcharge for smokers. I believe we are self insured with BC/BS administering the program.
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Epsilon Delta
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Epsilon Delta »

manwithnoname wrote:
Epsilon Delta wrote:Sometimes management will use any excuse. Once my bosses-bosses-boss blamed missed income targets (and bonuses) on the Iranian revolution for 5 straight years.
ED:
You don't seem to be knowledgeable of how a business is run. Every employer's business model projects how much of total income it will spend for employee costs including salaries, bonuses, benefits, worker's comp, etc. In the financial services industry 50% is the benchmark. If one benefit/HR cost goes up, such as health care then other costs such as 401k contributions, employee comp must go down.
A corporation is legally obliged to maximize profit. This means they are also required to minimize expenses as long as that does not harm revenue. So the reason a company cuts compensation is that they think they can do so without driving the employees they need away. That is the real, and the only reason, they cut compensation. The stated reasons are because they think they can get people to work for less if they disguise the fact that they are sociopaths.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by IlliniDave »

xiosen wrote:Hello all,

My GF just received a letter from her employer that sounds like they are essentially removing the 401k matching and using obamacare as a scapegoat. I am really concerned about these changes since she just started working for this company and has yet had a chance to contribute to the 401k. It also sounds like the heathcare costs are nearly doubling. Is this a similar trend across all your companies? What do you suggest she do?

Part of the email below:
Wasn't 100% clear to me that there was causality between ACA and the matching. I've heard of other companies outright eliminating matching recently, not even making it discretionary. At my employer we've been hearing a lot about ACA and our contributions to the premiums are going up. It's very hard for me to imagine that the plans we had were in any way "substandard", but apparently they were. The irony is I think there's some danger of our highest option plan falling into the "cadillac" category with the increases due to required changes for ACA compliance.

But our employee costs have gone up every year for at least the past 12 years, and the increase this year is in line with increases in recent years.

This is definitely throwing a wrinkle into my early retirement planning. All the early retirees and/or part-time working people I know of my age demographic (~50) are looking at significant increases when they replace their cancelled policies.
Last edited by IlliniDave on Tue Nov 05, 2013 4:34 pm, edited 2 times in total.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (insurance, 401(k)).

Please avoid giving opinions of Obamacare law (facts are fine), or ranting about greedy corporate profits.
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Meaty
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Meaty »

I don't mean to be cold, but welcome to reality. Most companies condition 401k matching on company performance. After all the business exists to maximize profits for the owners/shareholders. Nothing more, nothing less
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manwithnoname
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Re: Obamacare, increased health costs, disappearing 401k?

Post by manwithnoname »

Epsilon Delta wrote:
manwithnoname wrote:
Epsilon Delta wrote:Sometimes management will use any excuse. Once my bosses-bosses-boss blamed missed income targets (and bonuses) on the Iranian revolution for 5 straight years.
ED:
You don't seem to be knowledgeable of how a business is run. Every employer's business model projects how much of total income it will spend for employee costs including salaries, bonuses, benefits, worker's comp, etc. In the financial services industry 50% is the benchmark. If one benefit/HR cost goes up, such as health care then other costs such as 401k contributions, employee comp must go down.
A corporation is legally obliged to maximize profit. This means they are also required to minimize expenses as long as that does not harm revenue. So the reason a company cuts compensation is that they think they can do so without driving the employees they need away. That is the real, and the only reason, they cut compensation. The stated reasons are because they think they can get people to work for less if they disguise the fact that they are sociopaths.
If corporations were legally required to maximize profit then they would be sued by shareholders for making charitable contributions, giving away products are services such as computers and drugs to the needy and investing in unprofitable ventures such as green energy experiments.

Profit maximization by corporations is a business model that us taught in various business school courses but it is not an enforceable legal doctrine.

http://propertybusiness.wordpress.com/2 ... or-market/

http://en.wikipedia.org/wiki/Profit_maximization
Bob's not my name
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Bob's not my name »

At my employer, they tell us insurance premiums are rising 9% due to ACA and another 1% due to generally rising healthcare costs. The total increase is about $400 for the employee.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Oliver »

IlliniDave wrote: This is definitely throwing a wrinkle into my early retirement planning. All the early retirees and/or part-time working people I know of my age demographic (~50) are looking at significant increases when they replace their cancelled policies.
There are also people in there 40's and 50's who could not get insurance in this country due to preexisting condition. (I am one) My advice is to check the price yourself in your area or the area you would retire 2. I would then estimate your retirement income prior to social security & medicare. Many people who retire early find that their taxable income is low enough to qualify for the subsidy. I hope the calculations show that your goal of early retirement is just around the corner.

Subsidy calculator - http://kff.org/interactive/subsidy-calculator/
PS Not everyone's rate went up.

http://www.bogleheads.org/forum/viewtop ... 2&t=125395
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Re: Obamacare, increased health costs, disappearing 401k?

Post by manwithnoname »

Bob's not my name wrote:At my employer, they tell us insurance premiums are rising 9% due to ACA and another 1% due to generally rising healthcare costs. The total increase is about $400 for the employee.
ACA is raising premiums because all health insurance must cover benefits previously excluded in some policies such as mental health, preexisting conditions, wellness care, as well as pediatric rental examinations. All policies are required to cover maternity care. Policies can no longer have lifetime limits on amount of benefits.

Ten Essential Benefits: A Quick Summary of ObamaCare "Essential Health Benefits"

Starting January 1st of 2014, the following "Ten Essential Benefits" must be included under all insurance plans:

• Emergency services
• Hospitalizations
• Laboratory services
• Maternity care
• Mental health and substance abuse treatment
• Outpatient, or ambulatory care
• Pediatric care
• Prescription drugs
• Preventive care
• Rehabilitative and rehabilitative (helping maintain daily functioning) services
• Vision and dental care for children

Essential Benefits are provided with no out-of-pocket limits to the amount of care you can receive on every insurance plan sold on ObamaCare's Online Health Insurance Marketplace.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by BrooklynInvest »

Sticking to the facts, per the guidelines -

ACA allows me to retire early.

Prior to ACA - At 55 I would have had to go to an insurance company and, assuming I had no preexisting conditions and the company thought my coverage would be profitable for them, I would get a policy. If I had a preexisting condition or was likely to be unprofitable (obesity, health scares, other injuries not currently causing health problems but increasing the likelihood of future problems like past injuries or health scares) I would be denied and unable to stop work.

The insurer was under no obligation to renew my policy if I got sick or my profitability otherwise declined. My policy would almost certainly have a ceiling that may or may not have been enough to cover serious illness, assuming of course prior claims weren't rejected.

Under ACA - The insurer cannot discriminate on the basis of preexisting conditions, has no ceiling for catastrophic illness and I cannot be denied coverage at a later date based on my profitability.

Before ACA it didn't matter how much money I amassed. I could have lost it all by committing the sin of getting sick. Now retiring early without going back to England is thankfully a reality for me.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by madbrain »

xiosen wrote: My GF just received a letter from her employer that sounds like they are essentially removing the 401k matching and using obamacare as a scapegoat. I am really concerned about these changes since she just started working for this company and has yet had a chance to contribute to the 401k. It also sounds like the heathcare costs are nearly doubling. Is this a similar trend across all your companies? What do you suggest she do?
No such trend at my very large tech employer. The cost for my Kaiser Northern California HMO is actually flat from 2013 to 2014 .
The other plans are seeing small increases.

Is this a small or large company making these changes ?
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xiosen
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Re: Obamacare, increased health costs, disappearing 401k?

Post by xiosen »

madbrain wrote:Is this a small or large company making these changes ?
I would say somewhere in between. They own quite a few companies but I don't believe they are large.
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BrandonBogle
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Re: Obamacare, increased health costs, disappearing 401k?

Post by BrandonBogle »

My MegaCorp raised our health insurance by $1.29 per paycheck (so $1.29 * 26 = $33.54 for the year), but also changed it so that the employee paid portion of prescriptions ($7, $14, $21, etc) would count towards the deductible when in 2013 it would not. They also changed the doctor visit copay from a flat $25 to 20% of doctor visit fee. Seeing as my doctor visit fee is $55, $85, or $125 (depending on how comprehensive the visit is), I save money on most visits and never pay more than I do currently.

Meanwhile, our 401k still has a 6-8% (6% guaranteed and 1-2% discretionary, which has been paid every year since 2008, inclusive) match.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by beachplum »

Bob's not my name wrote:At my employer, they tell us insurance premiums are rising 9% due to ACA and another 1% due to generally rising healthcare costs. The total increase is about $400 for the employee.
Just received the health insurance prices at my husband's company for 2014. Premiums did not increase from last year on either account based health plans or traditional plans. Actually on our HSA plan our in-network annual deductible came down $800.
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Calm Man »

BrandonBogle wrote:My MegaCorp raised our health insurance by $1.29 per paycheck (so $1.29 * 26 = $33.54 for the year), but also changed it so that the employee paid portion of prescriptions ($7, $14, $21, etc) would count towards the deductible when in 2013 it would not. They also changed the doctor visit copay from a flat $25 to 20% of doctor visit fee. Seeing as my doctor visit fee is $55, $85, or $125 (depending on how comprehensive the visit is), I save money on most visits and never pay more than I do currently.

Meanwhile, our 401k still has a 6-8% (6% guaranteed and 1-2% discretionary, which has been paid every year since 2008, inclusive) match.
Brandon,
Hopefully your doctor visits stay at a max of $125. I can tell you that should you require specialist care, this can go way up. If for example, somebody gets a new diagnosis of cancer and goes to a specialty cancer hospital, the insurance company approved charge for an initial visit is as high as $600. I have seen examples.
IlliniDave
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Joined: Fri May 17, 2013 7:09 am

Re: Obamacare, increased health costs, disappearing 401k?

Post by IlliniDave »

Oliver wrote:
IlliniDave wrote: This is definitely throwing a wrinkle into my early retirement planning. All the early retirees and/or part-time working people I know of my age demographic (~50) are looking at significant increases when they replace their cancelled policies.
There are also people in there 40's and 50's who could not get insurance in this country due to preexisting condition. (I am one) My advice is to check the price yourself in your area or the area you would retire 2. I would then estimate your retirement income prior to social security & medicare. Many people who retire early find that their taxable income is low enough to qualify for the subsidy. I hope the calculations show that your goal of early retirement is just around the corner.

Subsidy calculator - http://kff.org/interactive/subsidy-calculator/
PS Not everyone's rate went up.

http://www.bogleheads.org/forum/viewtop ... 2&t=125395
Hi Oliver,

I think it is wonderful that you and many others are now able to get insurance where before it was not possible. The sample size behind my remark is pretty small, yet it is still the only one I have (among people whom I know well enough to talk about it with). I don't doubt there are people who will find themselves paying less than they did prior to ACA. I appreciate the link, and I'll take a look at it. I haven't priced policies for myself under the new system yet. I'm still about 5 years off and thought I'd let the surge of people who need to do it this year get their stuff done before I go and start playing around with the system. Based on stuff tossed around in the news I'll probably be right around the edge of subsidies. Even if my premiums wind up somewhat higher than the pre-ACA commercial policies I'd been pricing for planning purposes, I don't think it's going to be the straw that breaks the camel's back. But I'll just have to see.

Edit to add: despite the uncertainty and probable higher initial costs for me, if ACA is successful and lasts it's a major asset to me as a potential early retiree (someone else mentioned this above). My health is good now but I could easily find myself in the same situation you were in should something happen regarding my insurability in the next 5 years. So while I have concerns, I must admit (with some discomfort over the selfish perspective) it's far more of a plus for my retirement prospects than a potential hindrance. The uncertainty is what's most disconcerting, and in the big picture that's a minor consideration. Once I determine about where I'll be with a bronze-level policy, then it's a simple matter to retool the plan I hope.
Don't do something. Just stand there!
manwithnoname
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Re: Obamacare, increased health costs, disappearing 401k?

Post by manwithnoname »

BrooklynInvest wrote:Sticking to the facts, per the guidelines -

ACA allows me to retire early.

Prior to ACA - At 55 I would have had to go to an insurance company and, assuming I had no preexisting conditions and the company thought my coverage would be profitable for them, I would get a policy. If I had a preexisting condition or was likely to be unprofitable (obesity, health scares, other injuries not currently causing health problems but increasing the likelihood of future problems like past injuries or health scares) I would be denied and unable to stop work.

The insurer was under no obligation to renew my policy if I got sick or my profitability otherwise declined. My policy would almost certainly have a ceiling that may or may not have been enough to cover serious illness, assuming of course prior claims weren't rejected.

Under ACA - The insurer cannot discriminate on the basis of preexisting conditions, has no ceiling for catastrophic illness and I cannot be denied coverage at a later date based on my profitability.

Before ACA it didn't matter how much money I amassed. I could have lost it all by committing the sin of getting sick. Now retiring early without going back to England is thankfully a reality for me.
Brooklyn:

The door swing both ways on ACA costs which now requires that I must buy benefits I don't need in order to subsidize the costs for others in the program.

My Medicare advantage plan which covers 80,000 other participant is being cancelled because of the ACA. The plan was perfect because I had dental and vision and I was able to opt out of Part drug benefits because I get my meds from the government for $8 a month. I now have a choice between a low cost plan with no drug benefits for $70 a month and a large deductible and a new part C plan with dental and vision for $158 a month where I will pay $80 for drug benefits I will not use.

I look consider this to be subsidizing some else's benefit by my overpaying $1000 a year for benefits I will not use instead of getting the health care I need and contributing $1000 to charities that could use the additional donations. All OBAMAcare is doing is shuffling the deck to create different classes of winners and losers.

[OT comment removed by admin LadyGeek]
cubedbee
Posts: 312
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Re: Obamacare, increased health costs, disappearing 401k?

Post by cubedbee »

manwithnoname wrote:
BrooklynInvest wrote:Sticking to the facts, per the guidelines -

ACA allows me to retire early.

Prior to ACA - At 55 I would have had to go to an insurance company and, assuming I had no preexisting conditions and the company thought my coverage would be profitable for them, I would get a policy. If I had a preexisting condition or was likely to be unprofitable (obesity, health scares, other injuries not currently causing health problems but increasing the likelihood of future problems like past injuries or health scares) I would be denied and unable to stop work.

The insurer was under no obligation to renew my policy if I got sick or my profitability otherwise declined. My policy would almost certainly have a ceiling that may or may not have been enough to cover serious illness, assuming of course prior claims weren't rejected.

Under ACA - The insurer cannot discriminate on the basis of preexisting conditions, has no ceiling for catastrophic illness and I cannot be denied coverage at a later date based on my profitability.

Before ACA it didn't matter how much money I amassed. I could have lost it all by committing the sin of getting sick. Now retiring early without going back to England is thankfully a reality for me.
Brooklyn:

The door swing both ways on ACA costs which now requires that I must buy benefits I don't need in order to subsidize the costs for others in the program.

My Medicare advantage plan which covers 80,000 other participant is being cancelled because of the ACA. The plan was perfect because I had dental and vision and I was able to opt out of Part drug benefits because I get my meds from the government for $8 a month. I now have a choice between a low cost plan with no drug benefits for $70 a month and a large deductible and a new part C plan with dental and vision for $158 a month where I will pay $80 for drug benefits I will not use.

I look consider this to be subsidizing some else's benefit by my overpaying $1000 a year for benefits I will not use instead of getting the health care I need and contributing $1000 to charities that could use the additional donations. All OBAMAcare is doing is shuffling the deck to create different classes of winners and losers.

[OT comment removed by admin LadyGeek]
ACA did not mandate any benefit changes to Medicare Advantage or for carriers to stop selling any plans. The only thing it did was cut the amount the federal government will reimburse insurance companies, because Medicare Advantage members were costing 14% more than normal Medicare members. Your carrier is exiting your plan because appparently they can't provide the services at the reduced cost.

If anything, this is a matter of you underpaying in the past as the federal government subsidized your extra benefits, and now you are going to be paying your fair share to buy those benefits like all the normal Medicare enrolles.
an_asker
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Re: Obamacare, increased health costs, disappearing 401k?

Post by an_asker »

manwithnoname wrote:[...]Brooklyn:
...[OT comment removed by admin LadyGeek]
[Response to OT comment removed by admin LadyGeek]
MP173
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Re: Obamacare, increased health costs, disappearing 401k?

Post by MP173 »

Our family premium thru the employer is more going up 3x (yes, 3times) the previous rate.

The solution offered is a low premium with high deductibles and "free money" from the employer in the form of HSA. It will still result in a much higher OOP cost for our family, all things being equal.

The employer is a very large university.

Not complaining about a certain law...just stating the facts.

Ed
User avatar
BrandonBogle
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Re: Obamacare, increased health costs, disappearing 401k?

Post by BrandonBogle »

Calm Man wrote:
BrandonBogle wrote:My MegaCorp raised our health insurance by $1.29 per paycheck (so $1.29 * 26 = $33.54 for the year), but also changed it so that the employee paid portion of prescriptions ($7, $14, $21, etc) would count towards the deductible when in 2013 it would not. They also changed the doctor visit copay from a flat $25 to 20% of doctor visit fee. Seeing as my doctor visit fee is $55, $85, or $125 (depending on how comprehensive the visit is), I save money on most visits and never pay more than I do currently.

Meanwhile, our 401k still has a 6-8% (6% guaranteed and 1-2% discretionary, which has been paid every year since 2008, inclusive) match.
Brandon,
Hopefully your doctor visits stay at a max of $125. I can tell you that should you require specialist care, this can go way up. If for example, somebody gets a new diagnosis of cancer and goes to a specialty cancer hospital, the insurance company approved charge for an initial visit is as high as $600. I have seen examples.
I should have better stated that the copay is for primary doctor visits only. Specialists still retain $0 copay, but bill thru at a typical 80/20 as they do today for us. Also, out annual out of pocket max is $4k (for single insured), including copays and our deductible.
Jack
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Jack »

MP173 wrote:Our family premium thru the employer is more going up 3x (yes, 3times) the previous rate.
Not complaining about a certain law...just stating the facts.
The facts do not include your previous rate. One dollar a month, one thousand dollars a month?
john94549
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Re: Obamacare, increased health costs, disappearing 401k?

Post by john94549 »

My wife's 401K match has always been discretionary.
DonDraper
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Re: Obamacare, increased health costs, disappearing 401k?

Post by DonDraper »

My large corporation has reported that our healthcare premium contributions will be flat to slightly lower in 2014.
Alex Frakt
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Re: Obamacare, increased health costs, disappearing 401k?

Post by Alex Frakt »

Locked. Non-actionable. Other than to tell the OP to assist his wife in looking for another employer.

FWIW, I administer our small business health care plan through BCBS. Total cost went up 1.5% this year.
Locked