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USA 829 Draft Proposal Maintaining Health Coverage During Pregnancy/Adoption
Prepared for: Cecelia Fredericks, National Business Agent, USA Local 829 Prepared by: Fitz Patton, Sound Designer
Robert Kaplowitz, Sound Designer
October 16, 2011
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32 Union Square East #1214 New York, NY 10003
T 646-232-6468
fpatton@barnard.edu
www.fitzpatton.com
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Proposal Summary Problem When a member of 829 becomes pregnant/adopts, they step away from the workforce to give birth/receive and care for their child. As they do so their employer contributions drop and they become vulnerable to a loss of coverage at precisely the time when they need it most.
Objective We seek to ensure that the insurance coverage of an expectant member, in good standing with USA 829 and presently insured by 829, is maintained across the most critical period of time preceding and following birth/adoption. If during pregnancy/adoption an insured’s contribution level dips beneath the minimum level necessary to maintain coverage, we propose to offer, for a single 6 month period (the last trimester of pregnancy and the 1st 3 months of the child’s life), a one-time-per-birth/adoption coverage of employer contributions necessary to maintain coverage. Amongst the many unique qualities of pregnancy/adoption is that it can be planned for: it occurs for a defined period of time and its costs can be properly anticipated. Because its parameters and scope can be fully quantified, the indeterminate answer to the question, “Will I keep my insurance coverage if we have/ adopt a child?” can and should be addressed.
Solution We believe a shared contribution between the expectant member and 829 can achieve a 3 to 1 positive dollar for dollar outcome, where every dollar provided by 829 saves the member more than 3 times that amount while maintaining that member in positive standing with the union health plan at a time when losing coverage is, unarguably, disastrous. We can work with our members, the plan administrator (ASO) and the trustees to study and estimate the potential cost of this benefit to our members by examining the present composition of our membership, determining who, in the past 2 years, would have required this assistance. We will then be in a position to decide whether the outcome, bridging the perilous gap between pregnancy/ adoption and employer contributions to maintain insurance coverage, is feasible. That it is meritworthy is beyond dispute.
Draft Proposal: Maintaining USA 829 Health Insurance Coverage During Pregnancy/Adoption
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Outcome To enable our expectant members, in partnership with their union, to strategize and plan for the cost of their health insurance during pregnancy/adoption. Our expectant members will rest assured that, regardless of the impact of pregnancy/adoption on their employer contributions, they will be able to plan for and, should they choose, maintain their insurance coverage in the last trimester of their pregnancy/adoption and the first 3 months of their child’s life.
Our primary objective: to free the expectant family completely from a fear of loss of this most essential and critical support, their healthcare insurance, at the time when it is most needed.
Draft Proposal: Maintaining USA 829 Health Insurance Coverage During Pregnancy/Adoption
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Proposal: Details and Analysis • How does pregnancy/adoption differ positively from other more typical uses of healthcare, such as accident, illness or injury? 1. It is planned. 2. It has a defined/limited period. 3. Its costs can be estimated and planned for. These differences make pregnancy/adoption something that can be planned for because it has a defined period of occurrence and it's costs can be accurately estimated.
• Why address this problem now? Under the new program our members are bearing a significantly greater cost for their healthcare. Therefore, we think it's reasonable to display a more comprehensive engagement with the product they are buying. While the insurance system doesn't answer the question "How can I pay for my health insurance while I'm pregnant/adopting and can not work?", we can. That's what were here to do as a union, to solve these kinds of problems. This is the kind of thing we do really really well.
This our core competency.
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What are the options outside the 829 Health Plan? • COBRA The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan. COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
• What does COBRA cost USA 829 members who lose their coverage? The current cost of carrying a family plan on COBRA, maintaining all elements of coverage (including dental and vision) is:
COBRA, Monthly Cost for 829 Members: $1686.59
COBRA, 6 Month Cost for 829 Members: $10,119.54
COBRA Medical and Prescription Only (excluding dental and vision),
COBRA, Monthly Cost for 829 Members: $1,601
COBRA, 6 Month Cost for 829 Members: $9,606
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Important Note: ASO does not know, at this time, what the COBRA cost will be for the High/ Low options once the new plan takes effect.
• How does the cost of COBRA compare to the cost of the USA 829 Health Plan, assuming the member pays the full buy-up to Plan B Family coverage? The full cost of Plan B Family coverage including employer contribution and administrative fees is $926/month, or $5556 for the 6-month span. This total is comprised of the following components:
Employer Contribution Member Self-Financed Full Buy-Up Administrative fee
$1,300 $4,500 $1,056 ===== $5,556
COBRA cost for 829 members for a 6 month period:
$10,119.54
USA 829 Full Buy-Up Cost for a 6 month period:
$5,556
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$4563.54 additional cost for COBRA
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Are there inexpensive alternatives to COBRA? 1.
CHIP: Administered by the Centers for Medicare and Medicaid Services, CHIP, or
Children’s Health Insurance Program, insures children
CHIP covers: • • •
Under 19 years of age A U.S. Citizen, U.S. National or Qualified Alien Uninsured and not eligible for Medical Assistance
CHIP does not cover the parent. In New York State, Family Health Plus is designed to complete this coverage, by insuring the parent.
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2.
Family Health Plus (New York State Only)
Family Health Plus is available to single adults, couples without children, and parents. You must have limited income; be aged 19 to 64, a resident of New York State and a United States citizen or fall under one of many immigration categories.
In New York State, a combination of CHIP and Family Health Plus is possible for families of 3 earning less than $27,795. This number, itself, is below the minimum required by USA 829 to qualify for family coverage. A single parent can earn no more than $10,890, well below the minimum required for USA coverage.
• Conclusion Those members who qualify for CHIP and Family Health Plus do not qualify for family or single coverage with 829 and would therefore not be insured by 829 at the time of pregnancy/adoption. Therefore, these programs are not a relevant solution for those members in good standing with USA and it’s insurance benefit. Draft Proposal: Maintaining USA 829 Health Insurance Coverage During Pregnancy/Adoption
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Final Analysis: Conclusions Let’s go back to where we left off in our comparison with COBRA:
COBRA cost for 829 members for a 6 month period:
$10,119.54
USA 829 Full Buy-Up Cost for a 6 month period:
$5,556
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$4563.54 additional cost for COBRA
• Analysis The loss of $1,300 in employer contributions due to pregnancy/adoption can result in a both a loss of coverage with 829 and an increase in insurance cost to the member under COBRA of $4,563.54, or more than 3 times the cost of the missing employer contributions.
• Conclusion 1. The additional cost of COBRA, alone, is nearly equal to the entire cost of a full buy-up by the member into the 829 plan. 2. Were USA 829 to grant those members who fall short of their minimum employer contributions, as a consequence of pregnancy/adoption, an employer contribution waiver for the 6 month period including the third trimester of the pregnancy and 1st three months of the child’s life, the cost, $1,300, would both maintain the member’s coverDraft Proposal: Maintaining USA 829 Health Insurance Coverage During Pregnancy/Adoption
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age during the most critical time of expectancy and result in a savings to that member of $4,563.54, or more than 3 times this small investment.
This more than 3 to 1 dollar for dollar outcome reveals a significant efficiency latent within the present cost structure that we would do well to leverage on behalf of our membership.
• Outcome By granting our members a one time per expectancy/pregnancy waiver of the employer minimum contribution, the union achieves several significant outcomes. I.
Expectant parents are assured coverage at a time when they are most vulnerable
II.
Expectant parents can plan and strategize a successful navigation of the most difficult period of pregnancy, the third trimester and the first 3 months of a child’s life.
III.
The expectant family member does not feel stigmatized by the loss of their income, or carry any sense of responsibility for loss of coverage as a result of the pregnancy/ adoption.
IV. The union maintains a stronger relationship with it’s membership through one of the most significant but anticipatable and quantifiable medical events in a member’s life. V.
The Union delivers more for our members at a time when it is most difficult to do so by leveraging a latent efficiency within the new cost structure.
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• Final Statement from the Authors We believe that, having looked at this problem closely, there is a significant efficiency latent within the present cost structure of 829 coverage and COBRA that 829 can leverage on behalf of it’s expectant members, and thereby provide the very significant benefit of secure access to health insurance spanning the period of the third trimester and the first three months of the child’s life, or for the primary period of adoption. We believe this would provide a significant benefit to 829 members at minimal cost to 829. We regard it as a step in the right direction toward an eventual outcome of freeing the expectant family completely from a fear of loss of this most essential and critical support at the time when it is most needed.
We are sensitive to the context within which this proposal is being offered, but regard the upheaval in insurance pricing and the relative burden our members must now share as the most propitious and timely occasion for solving this inconsistency in the present system. A true Catch-22, the twisted knot of pregnancy/adoption and employer contributions can now be unbound, smoothing the way forward for all 829 families to plan for and strategize a successful outcome to the event of family expectancy.
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