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Charlotte workers’ health benefits more costly; companies focus on wellness

More Information

  • For some, enrollment begins Tuesday
  • Opinion: Obamacare in N.C.: A missed opportunity
  • Essential rules, numbers and websites
  • Archive: Read more on the health care act
  • How many are affected across the state and locally?

    1.5 million

    North Carolinians are uninsured.

    869,000

    are eligible for financial assistance to pay for health insurance under the new law.

    163,000

    Mecklenburg County residents are uninsured.

    80,000

    Mecklenburg County residents will qualify for subsidies.

    Sources: Families USA, North Carolina Institute of Medicine


  • Health care overhaul affecting companies

    The most visible piece of the Affordable Care Act to start next year is likely the public exchanges where individuals can buy health coverage. They’ll be set up starting Tuesday, with coverage kicking in Jan. 1.

    But a number of employer-focused changes will also start with the new year, as well.

    • Employers can no longer require workers to wait longer than 90 days before insurance coverage kicks in.

    • A new $63 annual reinsurance fee kicks in for each person covered. This fee, collected by the government, is intended to help reimburse issuers that cover high-risk people.

    • Companies are getting more leeway to push workers towards their wellness programs, or away from smoking. The size of incentives and disincentives they can offer is now larger. For example, companies can now charge a smoker 50 percent more for their insurance than a non-smoker.



Workers across Charlotte are starting to find out what their health benefit plans are going to look like next year – and the results won’t always be pleasant.

Overall costs are continuing to rise, with double-digit percentage increases in many cases. Health care inflation and new provisions of President Barack Obama’s health care overhaul are the reason, human resources consultants say.

In response, Charlotte’s largest employers are beefing up wellness programs that give workers the chance to knock down the price of their coverage. Some companies are restricting who is eligible for coverage under their plans.

At the same time, employees are flocking to high-deductible plans that are cheaper each month but would mean more out-of-pocket costs if they get hurt or sick.

Health insurance premiums have tended to go up 6 to 8 percent per year at Charlotte’s larger employers, said Steve Graybill, principal at human resources consulting company Mercer’s office in Charlotte. This year, new taxes and fees from the Affordable Care Act are adding 2 to 4 percent more on top of that.

In smaller companies, the increases are much higher.

“We’re hearing some horror stories right now,” said Cathy Graham, director of benefit services at The Employers Association in Charlotte. Premiums are going up between 35 and 75 percent for some smaller employers, she said. The biggest increases tend to be at companies with 50 or fewer employees.

Companies headquartered in Charlotte will be unveiling their final plans over the next month as open enrollment season begins.

None of them has announced major changes to the structure of their health benefits. But across the nation, other companies are making sweeping changes.

• Walgreens is sending more than 160,000 employees to a private health care exchange managed by Aon Hewitt. The company will pay each employee a set amount to help them make their premiums.

• Part-time workers at Home Depot and Trader Joe’s are being shifted to the public health care exchanges that will be launched as part of the Affordable Care Act. Trader Joe’s will pay each affected worker $500 toward their costs.

• UPS will stop providing health insurance to spouses of employees if the spouse has access to health insurance through his or her own employer. Human resources consultants in Charlotte said that decision is becoming more common.

Carrots and sticks

One of this year’s major changes from the Affordable Care Act involves the incentives companies can give employees for wellness programs.

At Bank of America, premiums are staying the same for employees making less than $50,000 per year, according to a document for employees on the bank’s website. For higher earners, rates are going up between 4 and 15 percent, depending on how much the employee makes and whether spouses or children are insured.

Workers will pay $20 more per pay period if they don’t go through a health screening, and $25 more if they use tobacco, the document says. For the first time this year, health screenings and tobacco surcharges will apply to employee spouses as well, spokeswoman A-T Connell said.

The bank, which employs about 15,000 in Charlotte, has also unveiled a new wellness program that begins Monday. Employees will be able to form teams of eight to 11 people and compete in health challenges, Connell said. The first one is an eight-week competition measuring how many steps employees take and how long they exercise.

“Addressing the rising cost of care is really a priority for us,” she said. “We’re committed to providing affordable health care and finding ways to help our employees with that cost of care.”

BB&T, Duke Energy and Family Dollar are among those with similar wellness programs.

At Duke, employees can have $960 taken off their premiums for next year if they haven’t used tobacco in the past 12 months, spokesman Dave Scanzoni said. They can get up to $400 more for going through a health screening and taking seminars.

The company has also tweaked who’s eligible under their plans.

Duke Energy said earlier this month that it would no longer offer retirees insurance policies that supplement Medicare coverage. It’s a move that other large companies such as IBM, GE, Dupont and Caterpillar have made as well. The McClatchy Co., which owns the Observer, is making a similar change at the end of 2014.

At Duke, Scanzoni also said interest has grown rapidly for the company’s high-deductible plans. Nationwide, more than 15.5 million people were enrolled in such plans this year, according to the America’s Health Insurance Plans trade association. That was up 15 percent from the year before.

Premiums for the more traditional PPO plans have grown faster than those in the high-deductible plans, leading more employees to go the high-deductible route. But Graybill, the principal at Mercer, said that might not always be the best decision.

“The word to consumers is, be thoughtful and think about the right option for you,” he said. “Don’t just jump to conclusions.”

Dunn: 704-358-5235; Twitter: @andrew_dunn
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