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Leetonia dropping health plans due to Obamacare

November 15, 2013
By TOM GIAMBRONI , Salem News

LEETONIA - When Village Council voted Nov. 6 to begin the process of canceling health care coverage for employees, it did so partially in response to changes brought about by the Affordable Care Act.

Village Fiscal Officer Randy Chismar said they were facing a nearly 33 percent increase in insurance premiums come 2014, which would have cost them an additional $18,000 per year. Their insurance carrier gave no reason for the increase, "but I'm sure it had something to do with our (claims) experience," he said and the fact they have a small coverage group.

There were five full-time village employees covered under the insurance plan, and they will now be free to shop for their own plans through the insurance exchanges established under the Affordable Care Act, more commonly known as Obamacare.

Chismar said a component of Obamacare played a major role in council's decision to do away with its insurance, and that is the provision requiring insurance be offered to some part-time employees.

"What I understand of the new health care law is anyone who works more than 25 hours per week, we will have to offer them insurance," he said. "That is something we could simply not afford."

Leetonia employs 8 to 13 part-time workers in various departments who work between 30 and 39 hours per week. Chismar said that group would have seen its hours cut back to 25 per week had the village decided to continue offering health insurance coverage to employees.

Chismar said the employees who lost their insurance and the part-time workers may actually pay less under the Obamacare insurance exchanges if they qualify for a tax-credit subsidy made available under the new law. He said the village workers on the plan paid 10 percent of their monthly premium.

As a small employer (less than 50 equivalent full-time positions), Leetonia will not be fined for discontinuing its health care coverage. Obamacare requires entities employing 50 or more workers to provide insurance.

The ordinance canceling health insurance coverage was passed on first reading at last week's meeting, and it must be approved two more times by council vote for the measure to take effect.

Mayor Artie Altomare said they are just playing the hand they were dealt. "We would have had to provide insurance to more people and it was getting increasingly expensive for the village," he said. "I feel bad for the employees, but some might do better with the tax credit."

tgiambroni@mojonews.com

 
 

 

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