Expand Health Coverage
Posted 05/25/2007 - 2:09pm
From Encore
Fear of losing coverage keeps many workers tethered
to jobs they are otherwise ready to leave, inhibiting their
ability to launch encore careers. According to the Kaiser
Family Foundation, those over fifty but not yet eligible for
Medicare at sixty-five face the hardest time getting affordable
individual health insurance because of age-related premiums
and restrictions on preexisting conditions.
Short of a true universal plan, there are various ways to increase health insurance coverage for workers in their fifties
and sixties. One proposal is to allow individuals to buy into
Medicare early, at a rate similar to group insurance policies
that provide similar benefits and without regard to preexisting
conditions. Another option is to extend the time period for so-called COBRA coverage, which allows former employees to pay their own premiums for group coverage under an employer’s plan, until individuals are eligible for Medicare.
At the same time, higher health care costs for older workers
represent a direct disincentive for hiring. The costs of providing health coverage for workers over fifty-five can be as
much as twice the cost for workers younger than forty-four.
There is one simple fix: Change federal rules that require
employers to provide workers’ coverage under their employer
group plans. Allowing workers over sixty-five to get their
coverage through Medicare would reduce employers’ costs,
creating an incentive to hire these workers.
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Kohl's bill
Here are details of Sen. Kohl’s “Health Care and Training for Older Workers Act” (S.708)
(Note: Sen. Kohl is holding a briefing on Encore issues on
Wednesday, July 11, 2007
12:30 – 1:30 PM (please arrive at noon)
Russell Senate Office Building, Room 188)
1. Extended COBRA Coverage for Older Workers. If worker age 62+ would lose group health coverage when phasing down their work, the bill provides COBRA continuation coverage for 36 months – bridging the gap to Medicare eligibility at age 65. Under current law, this coverage would be available for only 18 mo. As under current law, the bill also plans to charge a premium of up to 102 % of the plan’s premium.
2. Improved Access to Job Training Programs
The Workforce Investment Act (WIA) provides funding for training all adults. However, because WIA measures effectiveness in part by the change in earnings, older workers – who tend to seek part-time work and earn less when they get new jobs – face barriers to enrollment. The bill corrects the earnings performance measures to provide equal access to older workers, and requires states to report the performance and participation of older workers.
3. Clearinghouse of Best Practices for Hiring and Retaining Older Workers.
The bill requires the Dept. of Labor to establish a clearinghouse of best practices in the private and public sectors for hiring and retaining older workers. Within 6 months, DOL must identify best practices and make the information publicly available through the Internet. DOL must update the information annually.
This is big news
The opportunity here is in expanding choices for people in the 55-64 grouping.
My thought is that the companies behind this should be communicated with, and urged to delve into how this category of people can be helpful in working on the kinds of matters identified by the Encore movement.
It needs to be treated at a high level—not just by Human Resource administrators.
This all adds to upping the ante on what’s possible.
Important step to offer health coverage to retirees
Milt Freudenheim reports June 23 in the New York Times on a group of companies that are participating in a plan sponsored by the HR Policy Association to offer health coverage to retired employees aged 55-64.
For people not yet eligible for Medicare, concern about health coverage is one of the biggest obstacles to changing careers or launching encores. (See the Conference Board report issued in conjunction with the BreakThrough Awards.)
Highlights of the article, “Keeping Early Retirees Afloat”:
1. A group of big employers are stepping up to offer health insurance to up to 800,000 early retirees affected by buyouts, layoffs, downsizing, off-shoring.
2. Monthly premiums range from $400 – 1200 depending on employee contribution levels – much less than the cost of individual coverage. Caveat: Even with lower costs, many of the 800,000 eligible employees won’t be able to participate because they still can’t afford the premiums.
3. No one can be turned down for coverage regardless of prior condition – very important for this age group.
4. The sponsor: The HR Policy Association (Jeffrey McGuiness, president) which represents 250 large companies including GE, IBM, Sears, Starbucks and UPS, which has been running a pilot of the program for the last two years. During the first year no more than 20 companies are expected to participate.
5. Aetna will administer the coverage. Aetna is willing because the large employers are able to assemble a large enough pool of early retirees to spread the risks and the costs.
6. Motivation of employers: helps recruit or retain younger employees in competitive areas who worry about the increased disappearance of retirement benefits. Keeps older workers from staying in jobs (“retiring in place”) in order to continue health coverage even though they don’t like their jobs any longer.
Implications for Encore Careers:
1. Pre-Medicare employees who want to change careers to social purpose work could retire early with the safety net of affordable health coverage while they take a sabbatical, work for less (or no) pay and/or negotiate for a flexible work schedule that may not provide benefits.
2. May encourage more people to pursue a traditional leisure retirement if they don’t have to work to cover health benefits. Could limit movement into encore careers.
3. May encourage other creative solutions to pre-Medicare healthcare coverage by creation of large pools of workers (e.g. an Encore insurance group).
Interested in other reactions and approaches.