April 24, 2013

Governments may push workers to health exchange

By Mike Baker / The Associated Press

OLYMPIA, Wash. — In a move that would capitalize on provisions under President Barack Obama's health care law but could cost the federal government millions of dollars, Washington state lawmakers have found a creative way to pass a large chunk of their health care expenses along to Washington, D.C. – and analysts say others are likely to follow suit.

The plan threatens to affect the federal budget and the pocketbooks of some part-time workers, as it would push a group of employees out of their current health care plans and into an exchange developed under the Affordable Care Act.

Observers say the shift seems to run counter to the intent of the new health care law. Supporters, however, say it's a viable strategy for governments to pursue as they manage the insurance rules related to part-time staff.

Washington state appears to be the first major government to seriously explore the possibility of pushing workers into the exchange — but it probably won't be the last. Rick Johnson, who advises state and local governments on health care policy at the New York-based consulting firm Segal Company, said he expects it will be an option some governments will look at in the years to come.

"I can see that as one of the solutions out there," Johnson said.

A spokeswoman with the Department of Health and Human Services declined comment, and it's unclear whether the federal government accounted for this possible outcome.

While Democratic lawmakers have expressed concern about the Washington state plan this year, it is drawing growing interest among a bipartisan group of political leaders in the state. Democratic Gov. Jay Inslee, who supported the Obama health care law while in Congress, has reservations about the plan.

But the former congressman said federal rules don't dictate how employers and employees should handle insurance coverage and indicated that he may consider supporting the idea in the future.

"It's one of those ideas that's premature for us to launch this year, but I don't think we should take it off the table," Inslee said Tuesday.

The Washington state proposal has come before lawmakers as governments around the nation are formulating strategies to manage those who don't work 40 hours a week, since the federal law requires employers to provide coverage for those working at least 30 hours.

Virginia, for example, is requiring all part-time employees to work fewer than 30 hours, which will help the state avoid penalties for not providing health coverage. Florida, facing a potential $300 million penalty for not covering workers who have 30 to 39 hours a week, is moving to extend coverage to those employees.

Washington state is in a less common situation, since it already provides coverage for part-timers down to 20 hours a week.

Budget writers in Olympia say their plan would save Washington state $120 million over the next two years. However, it would consequently push more health care costs onto the federal government, since many low-income part-time state employees and education workers would likely qualify for federal subsidies.

Under the proposal, which has been advanced as a way to help deal with a $1.2 billion budget shortfall, Washington state would make policy changes and secure agreements in which staffers who work between 20 and 30 hours a week would get extra compensation but lose state health coverage. They would then be eligible to get health care in the federal plan, without any consequence for the state.

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