The Affordable Care Act has specific requirements for many businesses to provide some sort of healthcare benefit to their employees. In general, businesses with more than fifty full-time employees are considered "applicable large employers" and are subject to employer shared responsibility provisions, meaning they must provide affordable healthcare coverage with "minimum value" to employees and their dependents. If these employers choose not to provide this benefit, they may be required to pay an employer shared responsibility payment to the IRS.
Smaller businesses with fewer than fifty employees may not be required to provide benefits, but both in Alaska and across the country businesses are competing for qualified workers in a shrinking workforce. Increasingly, employees want to work for companies that offer more than just competitive wages, and a commitment to a healthy work-life balance and generous benefits can tip the favor to one company over another.
Bottom line: every business with even one employee needs to at least consider if or how to provide healthcare benefits.
That holds true in Alaska, which has the distinction of being an unfortunate "number one" when it comes to healthcare: worldwide, the cost of healthcare is highest in the United States, and among the states, healthcare is highest in Alaska. Alaskans and Alaska companies contend with the highest healthcare costs in the world.
So how a company pursues providing health insurance options to its employees is an important decision. Many businesses choose to partner with an insurance broker or directly with a healthcare insurance provider, while others find self-insurance a viable option. According to HealthCare.gov, a self-insurance plan is "usually present in larger companies where the employer itself collects premiums from enrollees and takes on the responsibility of paying employees' and dependents' medical claims. These employers can contract for insurance services such as enrollment, claims processing, and provider networks with a third party administrator, or they can be self-administered."
The clear advantage of self-insurance is the amount of control and autonomy a company has. The business can set rates for its employees, control administrative practices if it chooses, and determine the level of coverage (as long as it meets minimum federal requirements); however, the cost of healthcare services is of course determined by healthcare providers.
Insurance companies such as Premera Blue Cross and Moda Health help reduce costs for their customers by negotiating the cost of services with healthcare providers. Insurance providers leverage their number of customers to their advantage by creating networks of preferred healthcare providers: healthcare providers reduce their costs but see a higher influx of patients backed by insurance in return. But Premera Blue Cross serves more than 2 million people; even a large company with 5,000-plus employees doesn't have nearly the same negotiating power when it comes to reducing healthcare costs for itself and its employees.
So how can self-insuring organizations provide a high level of access to quality care while keeping costs manageable? That's where organizations like the Pacific Health Coalition can make a difference.
Pacific Health Coalition Overview
"This Coalition was created in 1994." says Pacific Health Coalition Executive Director Fred Brown. "Originally the idea was if they [iron...