In light of the Common Council’s decision of 12/16/2020 to not require the Appleton Housing Authority to find their own health insurance plan, I reached out to the AHA to gain a little more insight into their health insurance situation and the options available to them.
As you may recall, the Appleton Housing Authority has an agreement with the city of Appleton for housing authority employees to receive health insurance benefits through the city of Appleton’s group health plan.
The city is self insured and has to cover up to $250,000 in claims before their stop-loss insurance kicks in. What this means is that, if a housing authority employee has a catastrophic claim, the city of Appleton and its taxpayers will have to cover the costs of that claim up to a quarter of a million dollars, even though that person is not a city of Appleton employee. This can be particularly problematic if a claim stretches from one year into another because the city faces having to pay up to $250,000 in one year and then another $250,000 once the new year starts. While Appleton may gain some benefit from having AHA employees on their group health plan so long as those employees are healthy and paying in more than they are receiving in benefits, the city also shoulders all of the risk for providing that insurance and the possibility of having to pay $250,000 is a fairly hefty risk to take on, particularly on behalf of people who aren’t even city of Appleton employees.
As a result, city HR Director Sandy Matz recommended that Appleton no longer extend to the AHA the courtesy of allowing them to utilize the city’s group health insurance. She initially recommended that their insurance partnership be terminated at the end of 2021, however, the Human Resources and Information Technology Committee, at the request of the Appleton Housing Authority, voted to extend that deadline to the end of 2022.
Then, in the Common Council meeting of 12/16/2020, Alderperson Kyle Lobner successfully lobbied to remove any mention of the health insurance partnership between the city and the Appleton Housing Authority ending.
These changes were made because members of the Common Council did not want to place the Appleton Housing Authority in a tight place financially when the country and state are still dealing with the results of the pandemic. During the committee meeting, the AHA’s Finance Director, Aaron Hilbert, specifically told them that losing city of Appleton group coverage would be costly for the Housing Authority. He stated that they would “have” to switch over to the State of WI health insurance plan which would cost them an additional $36,000 to $60,000 a year. Employees also would see an increase of about $3,000 per family from switching over to the state HSA plan from the city’s HSA plan.
I have reached out to him twice for clarification but he has not responded. I wanted to know three things. (1) What did he mean when he stated the AHA would “have” to use the state insurance plan? (2) Had the AHA investigated getting coverage through the Small Business Health Options Program (SHOP) at healthcare.gov, and if so why had they determined that it was not a viable option? (3) Had the AHA investigated what the costs to their employees would be if they ceased offering health insurance at all thus making them eligible to receive subsidized health insurance from healthcare.gov?
As I said, I reached out to Aaron twice and he has not responded. At this point I am not convinced that the claims he made to the committee members accurately reflect the health insurance options available to the Appleton Housing Authority.
(1) I have combed the internet for any sort of evidence that a housing authority or an independent government agency would “have” to utilize state insurance but I have found nothing.
(2) Typically, a small business or non profit with fewer than 50 full time employees is not required to provide health insurance to their employees but they may if they so desire and an option available for them to provide that coverage is through the Small Business Health Options Program (SHOP). Unfortunately, in order to run a meaningful quote I would need a better idea of the ages and sexes of the people who would be covered by it, so I can’t give an estimate of what the AHA’s costs would be with a SHOP plan. I do think that the AHA had a basic responsibility to run those numbers and do a cost comparison.
(3) It’s a well known fact that the Health insurance landscape has changed dramatically in the last 5-10 years. When the Appleton Housing Authority was first created in 1967, there most likely were no good insurance options available to individuals other than going on an employer provided plan. The AHA may very well have had no viable way to provide affordable insurance to its employees other than by getting them access to the city of Appleton’s group plan. But that is not the case now. The Affordable Care Act has made insurance available to almost everyone. A perhaps surprising fact is that, right now, people are sometimes better off if they aren’t offered employer coverage because that means they can then qualify for subsidies to purchase insurance from healthcare.gov.
The Appleton Housing Authority has 10 family units and 4 individuals accessing Appleton’s health insurance plan. The median household income in Appleton is only $58,112 and Zip Recruiter lists an average Housing Authority salary of $51,127. At either of those income levels, a family of four could very well be better off if they were not offered employer provided insurance at all. Their two minor children would qualify for Medicaid (which, in this area, is one of the best insurances available since a majority of doctors accept it and copays are nominal), and the parents would qualify for fairly generous subsidies to purchase insurance from healthcare.gov. I threw together a couple hypothetical quotes, the first with an income of $58,112 and the second with an income of $51,127. A couple with two children at either of those income levels would be looking at a potential monthly premium of between $200 and $300 for a Silver plan and their children would be covered by Badgercare/Medicaid.
It’s really hard to see how this would be unaffordable, and it seems less expensive than the $1,500 a month that it was mentioned families pay for coverage under the Appleton group insurance plan.
I would not necessarily have expected the Alderpersons to have known anything about how health insurance works, but it does seem to me that things should, perhaps, have been investigated a little more thoroughly before it was simply accepted that the only other health insurance option available to the Appleton Housing Authority was the WI State plan. The Affordable Care Act was specifically made so that people who are self employed or work at small businesses with few employees have health insurance options. Now that it exists, perhaps the Appleton Housing Authority could start utilizing it instead of remaining on Appleton’s plan.
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