June 04, 2011|By John Fritze, The Baltimore Sun
WASHINGTON — — Pete Bryant, a leader of a Maryland-based bricklayers union, faced a difficult decision last year over how to apply the nation's new health care law to his 1,400 members: He could offer them nearly limitless health insurance, as the law demands, or he could try to get around the requirement.
The decision to provide the most comprehensive health coverage available should be a no-brainer, Bryant said. But the cost of providing coverage with virtually no annual cap on payouts — which government regulators acknowledge can raise premiums as much as fivefold — would likely reduce the number of construction projects that contractors would be willing to pursue. That could put workers out of a job, leaving them with no health insurance at all.
"It would be wonderful if everyone could be insured without limits," said Bryant, the secretary and treasurer of Bricklayers Local 1 of Maryland, Virginia and the District of Columbia. "But things have to be done in moderation and there have to be limits."
The union appealed to the federal government for a waiver.
Bryant's group is one of 15 Maryland companies and labor unions — employing 10,383 workers — that obtained a waiver to circumvent the initial requirement of the new health care law, a review by The Baltimore Sun shows. The figures do not include dozens of national and regional businesses that have received waivers, such as Cracker Barrel and Pepsi, that are based elsewhere but have employees in the state.
Nationwide, 1,372 companies and unions, representing more than 3 million workers, received exemptions. The numbers continue to climb.
The waivers have drawn criticism in part because President Barack Obama and Democrats in Congress touted the prohibition on insurance companies placing low annual caps on payouts as an immediate benefit of the law. Republican challengers in the 2012 presidential election have been raising the issue on the campaign trail.
Maryland companies that received exemptions this year include the Columbia-based media research firm Arbitron Inc., Rosedale-based Mars Super Markets and a Sykesville firm called Nexion Health that operates nursing homes in other states.
Labor organizations that opted out include District Council 51, a Lanham-based chapter of the International Union of Painters and Allied Trades, and Carpenters Local 491.
"Is there a continued concern from the small-business community regarding this law? There is absolutely," said Ellen Valentino, state director of the National Federation of Independent Business. "It's a concern regarding the cost of implementation."
Before the Affordable Care Act became law in 2010, insurance companies were allowed to set limits on how much they would pay to treat a patient in a given year. Some plans capped payouts at $1 million a year; others, often referred to as "mini-meds," set limits as low as $2,000.
Since 2010, the new law has prohibited annual caps of less than $750,000. By 2014, insurers will be barred from imposing any limit.
But the law allows the U.S. Department of Health and Human Services to grant a one-year waiver from the requirement in cases where raising the cap would cause a "significant increase" in premiums for employees or a decrease in coverage.
The number of waivers granted so far is relatively small, said Steve Larsen, who heads the Center for Consumer Information and Insurance Oversight at Health and Human Services, which administers the process.
"We want people to be able to continue their coverage without experiencing a large increase in premiums," he said. "The waiver process allows for that transition and allows for folks who have these polices now to keep them."
Larsen and other Obama administration officials stress that the waivers are a short-term solution. They say that many employees currently enrolled in mini-med plans will likely wind up buying insurance through state-based exchanges that will start up in 2014. Under that system, users will choose one of several private insurance plans offered in the open market rather than getting coverage through their employer.
But until that system is running, many companies are in a state of limbo.
"We felt we were placed in a dilemma," said Leslie Jackson, a spokeswoman for Diamond Comic Distributors in Timonium. "If we changed the plan to be in full compliance with the requirements of the new health care law, then it would no longer be a lower-cost alternative … and we feared that those folks would more than likely have to drop out."
Diamond, the country's largest distributor of comics, received a waiver for one of its health plans that has 37 enrollees, according to the Department of Health and Human Services. The company offers other, more comprehensive plans as well, Jackson said, but some employees simply prefer the less expensive coverage.
