Corporate Wellness Blog

When it comes to health-coverage laws, there’s often a domino effect.

As individual states require insurers – and in some cases, employers – to cover or offer coverage of specific individuals  and procedures, similar laws can spread quickly to other states.

The effect on plan sponsors –  Some mandates can increase your costs by 20 percent to 45 percent.

Small firms targeted, too

States are no longer targeting  just the Wal-Marts and other giant businesses anymore.  The pressure has increased on companys of all sizes.

That’s namely true for the new “universal coverage” laws passed in Massachusetts and Vermont.

The Massachusetts law requires every firm with 11 or more workforce either to cover or contribute toward everyone’s health coverage, or else pay an annual fee of $295 per staff member to a state fund.

Vermont’s similar version sets the annually fee at $365 per full-time equivalent worker.  The Vermont law also requires all uninsured, low-income hourly workers to have access to a state-subsidized plan (called Catamount Health) sold through private insurance businesses.

It’s up to businesss to deduct the monthly premiums – $60 to $135, depending on the person’s wages – and send it to the state.

There are rumblings in at least 10 states about lawmakers pushing for universal-coverage laws. A few have formed committees to study the Massachusetts law and see if a version may be adapted to their state.

Here are three proactive steps to consider now. These could potentially save money, time and compliance headaches later –

• look into offering mini-med or similar lower-cost programs to satisfy minimum coverage requirements for uninsured staff members. Monthly premiums range from about $25 to $200

• educate low-income workforce about the earned income-tax (EIT) credit the federal government offers. This could make a mini-med plan free or nearly free to eligible workforce, and

• use flexible spending accounts to develop a tax savings on premiums for other employees and your firm.

Required procedures

The universal-coverage laws draw national headlines, but far more businesss are currently affected by state laws requiring coverage for certain types of procedures. Three of the biggies –

• diabetes self-management. Nineteen states require your health plan to cover all the steps workers with diabetes take to control their condition, including nutritional therapy (if prescribed by a doctor)

• in vitro fertilization. This big ticket service adds 3 percent to 5 percent to your premiums, and is now a required benefit in 15 states, and

• cervical cancer screenings. In the last year, four more states have required all business plans to cover yearly cervical cancer screenings for all covered female staff, spouses and dependents age 18 and older. That brings the total to 24 states.

The good news about the diabetes management and cervical cancer mandates is they can reduce your  long-term costs, even if they increase them in the short-term.

Here’s a good resource  for keeping abreast of mandatory coverage trends around the United States.  The site also features  state-by-state breakdowns of changes in insurance laws  mandating the coverage of different treatments and conditions.

For  instance, this report from 2006 is the most comprehensive coverage-mandate study that I’ve ever seen.