City finds help navigating new healthcare changes

COLUMBIANA – A Cleveland-area business in the process of developing an office in the city is working with the city to cut its insurance costs, and Bob Gearhart Jr. said people should be aware of the effects of the Affordable Care Act, also known as Obamacare.

Gearhart Jr., is co-founder and director of strategic partnerships for DC Wellness with his father Bob Gearhart Sr., an Austintown native who serves as co-founder and president. The family inherited the Westlake-based insurance consulting agency from the elder Gearhart’s father Chuck Gearhart upon his passing in 2007.

Gearhart Jr. said whether people work with DC or not, they need to find a company that understands the new healthcare law.

“It is changing and does require more planning than it used to and there are a lot more items you need to be aware of,” he said.

With regards to Columbiana, some changes won’t have a major impact until 2015, City Finance Director Mike Harold said Thursday.

He referred to the requirement that all firms with 50 or more full-time-equivalent employees offer health coverage or pay fines. This portion of the law was originally slated to take effect Jan. 1 but was pushed to January of 2015 by President Barack Obama’s administration this summer.

“Under the healthcare (law) you’re considered full time if you work 30 hours or more. In our contract with the unions, full time is 35 hours or more, so this would be a change,” Harold said.

As a result, the city would be required to offer insurance coverage to even more employees, which is difficult considering they are already trying to cut insurance costs, and have been for more than a year.

To date, the city spends roughly $1 million a year through its self-funded plan administered by MCA Administrators. MCA is a third party administrator, and the 54 full-time city employees are covered through Medical Mutual.

A few years ago the city was spending just over $980,000 on the insurance. An increase in serious claims and the absorption of a portion of employees’ premium costs over the years caused that figure to climb to the million-dollar mark.

Harold said serious claims from last year carried over this year, and the city will likely be spending more money compared to last year.

Employees have the option of single or family insurance, and he said the city is looking into a change that would allow them to select a more defined coverage.

“There are things out there we may be looking at, some policies are employee-plus-spouse, or employee-plus-child, for someone who is divorced and (has) custody of children,” he explained.

As for the Obamacare mandate, he said departments will need to begin looking at how many hours part-time employees will be given.

“At this point we keep part-time under 35 hours, and we don’t have to offer insurance … That is really probably the biggest one that would affect us,” he said of the reform. “Of course, you never know what is going to happen now with the government shut down.”

Compco Industries in Columbiana avoided a 36 percent rate increase on their old insurance coverage after consulting with DC Wellness and entering into a private health insurance exchange April 1.

Gearhart Sr. said the manufacturing and processing company is one of only four in the state in the exchange and was spending $1.1 million a year on insurance before the switch. The rate increase would have tacked $360,000 onto that figure.

Compco President and CEO Rick Fryda said DC got the company “out of a big jam” by avoiding the rate increase.

The company has 91 families of the 125 eligible employees covered under the new plan.

“This is a big deal for us. This was a game-changer. I think our employees are very, very happy with what they have now,” Fryda said.

For himself, the change amounted to paying $200 a month to cover himself and his family, which includes six children, and a $1,000 deductible. Previously, he was paying $180 a month and had a $3,000 to $5,000 deductible.

The City of Columbiana is not looking into joining an exchange, but DC is meeting with the city’s insurance committee once a month.

“Right now we are in the introductory stages in explaining the different options available to the city and really discussing what their goals are, and offerings from a benefits standpoint. We are really going to make a collaborative effort to evaluate where we are today and ultimately where we want to be under healthcare reform,” Gearhart Jr. said. “Employers everywhere need to be aware of the new law and need to be preparing for the new law.”

As for the agency’s presence in Columbiana, he said they are in the process of relocating “several people” and plan to have a building by the end of this year.

“We are really putting a significant stake in the ground. We just couldn’t be happier about the work we are doing down there,” his father said.