Myths about Obamacare and Workers' Comp
Monday, November 25, 2013 | 4
The Obama administration has said that the Patient Protection and Affordable Care Act, enacted into law in 2010 and scheduled to take effect on Jan. 1, will reduce workers’ comp claims because so many additional people will be covered under personal insurance policies. But there is reason to think otherwise.
The first issue is that so many companies are reducing the insurance they offer employees or are cutting employees’ hours so much that they fall below the law’s threshold, so employees don’t have to be covered at all. Employees who aren’t covered under corporate policies or who are underinsured are more likely to make workers’ comp claims.
Here are just a few examples from National Review Online:
- SeaWorld used to let part-time employees work as many as 32 hours per week, but the company is dropping the limit to 28 hours to keep them under the 30-hour threshold at which it would be required to provide health insurance under Obamacare. More than 80% of the company’s thousands of employees are part time or seasonal.
- Carnegie Museum in Pennsylvania scaled back the hours of 48 of its 600 part-time employees to less than 30 hours a week to sidestep the mandate to provide health-care coverage.
- Virginia Gov. Bob McDonnell decided to limit the state’s part-time employees to 29 hours per week.
- Brevard County, Fla., told a local television station that the county’s 300-plus part-time employees will be “capped at something less than 30” hours to save the county about $10,000 per employee in health insurance.
- Fatburger announced that franchises had begun making efforts to keep employees under the 30-hour threshold, including some franchises engaging in “job sharing.”
As more companies shift to shorter work weeks, you can expect claims under workers’ comp to keep climbing.
Proponents of Obamacare still say it will decrease workers’ compensation costs in several ways, including through the elimination of lifetime caps on medical insurance coverage. The argument is that these caps on employees’ private policies pushed them to file workers’ compensation claims. Really? Many of the leading cost drivers for work-related injuries are Musculoskeletal Disorders (MSD), better known as soft tissue injuries. According to the Bureau of Labor Statistics (BLS), soft tissue injuries (sprains and strains) accounted for 40% of all work-related injuries that resulted in lost days of work. I do not believe that these types of injuries would affect the lifetime maximum for health insurance, which is typically $1 million.
Proponents also note that a health care insurer can no longer refuse to provide coverage because of preexisting conditions, conditions they claim were often not covered by private health care and thus encouraged employees to seek coverage under workers’ compensation. While this is a good point, the National Review’s examples show that many people are losing health care coverage or will see it reduced, meaning that there will be a greater likelihood of workers’ compensation claims. Yes, there are penalties for not securing health care coverage, but they are modest, especially in the early years of Obamacare, and there is no real mechanism for enforcement. The IRS has the responsibility for collecting penalties but has no true powers to do so.
How are people supposed to afford care if their hours have been cut? You guessed it: workers’ compensation.
MaryRose Reaston is the founder of Emerge Diagnostics, an Oklahoma-based company created to commercialize the electrodiagnostic functional assessment (EFA). This column was reprinted with her permission from the Insurance Thought Leadership blog.
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