Cedar Falls, Iowa, Cuts Worker Hours to Avoid Health Insurance

November 29, 2012

  • November 29, 2012 at 1:26 pm
    FFA says:
    Well-loved. Like or Dislike:
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    Didnt Iowa vote OBama? Its what they voted for. They are feeling the impact of their decision.

    • November 29, 2012 at 1:45 pm
      gguru says:
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      … it’s only the beginning. Look for businesses to do the same by either cutting number of employees or cutting work hours (and anyone who doesn’t think that will happen is an idiot).

  • November 29, 2012 at 1:42 pm
    Ben says:
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    $155,000/year for 59 employees? That breaks out to a little over $1,200 per employee per month? How does that make sense? There’s no way health costs could be that high

    • November 29, 2012 at 2:17 pm
      FFA says:
      Hot debate. What do you think?
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      Sounds in line in my neck of the woods. My one employee is being charged at over $1K a month no family – no spouse. With the inevitible spike in premiums due to Govt intrusion in preivate business sounds dead on.
      Article does not state if they are factoring in family coverage either.
      But, its what they voted for. Too bad this was not announced before the election so they could have voted to protect their income instead of losing it.
      There are more to come no doubt.

    • December 3, 2012 at 11:54 am
      Don't Call Me Shirley says:
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      $155,000 / yr – They could get rid of just one over-paid, unnecessary bureaucrat. Problem solved.

      • December 3, 2012 at 11:57 am
        Libby says:
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        It’s $855,000 for 59 employees, which is $14,492 per year for health insurance. What a crock!

  • November 29, 2012 at 1:51 pm
    Reddog says:
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    That $1,200 may also includes spouse and childres plus we don’t know what additional benefits are also provided…vision-dental-STD,etc. Based upon national average, the $1,200 is about right.

  • November 29, 2012 at 2:25 pm
    Libby says:
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    The law just states you have to offer health insurance. It doesn’t say you have to pay for it. You can pass that burden, or a large part of it, to the employee. If they can get insurance cheaper somewhere else, they are free to do so.

    I think Cedar Rapids is using this a scapegoat for other financial problems they must be having.

    • November 29, 2012 at 2:46 pm
      FFA says:
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      Most carriers require a 50% Contribution rate per employee – not spouse/family/domestic partners, just employee. Employers have to cover half the cost.

      Article states nothing about the Census or what contribution rate they chose. If they have an aged / unhealthy census, they may be estimating low. If they have a your healthy group – no med load, then their estimates may be high.

      We are not privilaged to the specific info they are so we can not know one way or the other.

      More people need to brace themselves for this reality. Its just a matter of time before this becomes common place.

      • November 29, 2012 at 2:59 pm
        4Law says:
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        I don’t think you know what you’re talking about. Some employers find a way to cover all the cost, while others pass along all the cost.
        This issue is a sideshow, however.
        What the Cedar Rapids situation suggests is that an employer-based health care system creates bizarre economic incentives, so the US should have Medicare for all. A broad-based tax pay for basic health care services for all. People will be free to spend their own money for more extensive care. This is how pretty much every other country does it.

        • November 29, 2012 at 3:08 pm
          FFA says:
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          “We are not privilaged to the specific info they are so we can not know one way or the other.”

          I thought I made that clear.

    • December 3, 2012 at 3:22 pm
      IA GAL says:
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      It is Cedar Falls not Cedar Rapids……very different towns.

  • November 29, 2012 at 2:25 pm
    Jon says:
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    That’s hogwash and political grandstanding almost at the level of Papa Johns owner.

    $855k a year for 59 workers?

    That’s $14,491.53 a worker per anum.

    My full coverage for my family doesn’t cost my employer that much.

    • November 29, 2012 at 2:52 pm
      FFA says:
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      Jon, that is right in line with mine. Consider your self fortunate. The closer I get to Chicago, the worse it gets. One group I have left is over $5K a month with a healthy population and a $5K ded and 4 employees with only 2 family units. And their not even in Chicago.
      I am sure your not as bad off as anywhere in IL which is why so many business have closed up and left the state. Thats is a decision I need to make soon, very soon.

      And why would this be Grand Standing? Seems like a simple business decision. Besides, Iowa voted for OBama. This is what they wanted/voted for.

      Its only going to get worse.

      • November 29, 2012 at 2:54 pm
        Libby says:
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        Your coverage is for your entire family. The employer is not required to contribute to spousal or family coverage unless they elect to. Cedar Rapids could have restructured their health benefit plan if it meant reducing hours. There’s more to this story that’s not being told.

      • November 29, 2012 at 3:45 pm
        Jon says:
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        I’m actually in the greater Chi-town area, so I’m right there for the demographic.

        Though I’m not an agent/broker, so I don’t see the rates others pay. I only know, as a claims guy, what I pay through my employer, and what my employer’s contribution is.

        • November 29, 2012 at 5:03 pm
          FFA says:
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          GO BEARS!!!!

          • November 30, 2012 at 9:41 am
            Jon says:
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            Only if Cutler stops being such a wimp.

            For the millions he’s getting paid, he should learn how to take a hit now and again.

          • November 30, 2012 at 10:02 am
            FFA says:
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            Now and Again? He is getting killed out there. Now the Carimi experiment begins this late in the season? We will never know how good / bad he is until they can keep him standing. They addressed the Receiver situation last off season but did nothing to keep him on his feet.

      • November 29, 2012 at 3:49 pm
        Libby says:
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        FFA, if I remember correctly both you and your wife have previous medical issues and both of you are in your 50′s. I would think that is the reason for the high cost of your healthcare coverage. Not Obamacare.

        • November 29, 2012 at 4:17 pm
          FFA says:
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          Thats correct. We are a max rated group. My employee is 63 and not healthy either.

          My Cobra was $779.00. Had to go group and cost spiked. Now, cost for me & wife is well over $1400 now that I turned 50+.

          I fear the impact of OBama Care will just put me out of Biz.

          • November 29, 2012 at 4:20 pm
            Libby says:
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            You must have just opened your shop if you were on COBRA through a previous employer.

          • November 29, 2012 at 4:45 pm
            FFA says:
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            Yes. I came out of the captive world after 18 years in April 09. I fell under Cal Cobra provisions and was able to keep it for an additional 18 months.
            One of my biggest beefs with what he did with the Cobra subsidy program. He made it easy for people to keep it at 25% of the costthat lost their jobs. I could afford the full boat, but had to give it up. He had good frame work to work with in. But he ignored the tweaking that could have been done with in Cobra Provisions and then jammed all these new taxxes down our throats. Pile them on top of Quinss taxxes, Il is in a world of hurt bleeding business to surrounding states.
            One thing that existed before HIPPA came into play was guaranteed conversion for people falling off groups. Govt intrusion in private business killed that. And now we have OBama Care – job killer at least in Iowa.

          • November 30, 2012 at 8:08 am
            Libby says:
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            I’m more of a P&C kind of girl, but guaranteed conversion doesn’t guarantee the same rates, does it? You would still need to be re-rated based on age and physical condition, right?

        • November 29, 2012 at 4:56 pm
          FFA says:
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          I need a Cornea Transplant on both eyes. I am legally blind. My wife needs back surgery due to the incident in the grocery store. She did / does have other issues, but this grocery store issue has made things much worse. Now, her pain clinic tossed her to the curb after she got pushy for info on the whole menengitis thing.

          • November 30, 2012 at 10:08 am
            FFA says:
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            Pre HIPPA, it did for a peroid of time. Point being the carriers with out being forced offered people a chance to keep it with out medical underwriting. It was the industries self goverened COBRA program. Kept the business out of the billing loop. Was good for people. Was good for Business. Its been soooo long, I dont remember all the details. As i worked my way through college, I worked for an agent that did a bunch of group health. I remember taking them conversion apps.

          • November 30, 2012 at 10:23 am
            Libby says:
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            Well, COBRA was signed into law by Ronald Reagan. So thank him for it. And I think it was because not all plans allowed for a conversion.

            But I don’t understand what Obama’s subsidy has to do with your situation. How did that affect you negatively?

          • November 30, 2012 at 1:32 pm
            FFA says:
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            Per my BCBS group rep and other group reps, The health carriers were forced to eat the $00.75 on the dollar. They were getting 25% of what they would normally charge. No business could survive doing that. If the reps were correct – and I have no reason to doubt they were making this up – the past two – three years – we are feeling the impact of that.

            I saw nothing in writing regarding this. I can not verify is this is or is not accurate. All I am basing this therory on is what I was told by the reps.

            Had the 18 month (36 months due to Cal Cobra in my case) limitation been removed, I will still be paying my COBRA rates and my employee would still be paying his COBRA rates which both were much less then what I am paying now.

            As far a Reagan goes, I can not worry about him or any other past president. My situation is here now and today. And yes, it is another example of Govt Intrusion into private business that messed up a good thing. If the sponsoring company folds today, there is no COBRA availible even if I could afford to pay it. Pre Cobra, it would have been availible with out medical undwerwriting and no pre x waiting peroid.

            In my opinion, it was the best we have had – ever. Had he worked with in the frame work of the current cobra laws, we would have had a better end result. Imagine all them people that lost their coverage when their company folded. Some could have afforded to keep it going on their own but did not have the option. Instead, everyone was on the free health care system that has cause so much havoc.

          • November 30, 2012 at 3:12 pm
            Libby says:
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            This is from the COBRA website:

            Why did the government create COBRA?
            Before COBRA in 1999, when an employee left their employer or company, they ended all their health insurance. If the employee or a family member had a pre existing condition, they could not get private health insurance. So the employee or qualified dependent stayed insured and off government programs.

            So, it was not a “given” that coverage automatically extended to you before COBRA. And the Obama subsidy was a tax subsidy that was received by filing quarterly tax forms. The carrier didn’t eat anything.

          • November 30, 2012 at 3:40 pm
            FFA says:
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            The carriers my agent sold for did offer Guaranteed Conversion pre cobra. It was a heck of a selling feature that employeers and employees leaving loved. So did the agent. He retained the business. It was truelly a win win win for all parties involved. That may have been a carrier feature that was not industry wide. I was just the paper work jockey at the time working through College. Did some sales, mostly service work.

            I know we took the Cobra Subsidy off our 1/4 tax filings, but who ate the money? Thats is the question I cant seem to find the answer to. Where did the buck stop? My reps told me the carriers ate the money. Fed Govt is too broke to eat that big of a chunk. Il is so broke, thay could not afford it either. Il is so far behind on paying its bills. I thought I read somewhere we have the worst credit rating in the nation.

    • November 29, 2012 at 3:31 pm
      Chris says:
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      Jon, my health coverage for myself and my family is over $30,000 a year at group rates. Just because YOU don’t pay that much doesn’t mean no one pays that much.

      • November 29, 2012 at 3:35 pm
        Libby says:
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        Family Health Insurance Premiums Drop for the First Time in Seven Years, According to eHealth’s 2012 Report on the Cost and Benefits of Individual & Family Health Insurance

        Today eHealth, Inc. (NASDAQ: EHTH), parent company of eHealthInsurance, America’s first and largest private health insurance exchange for individuals and families, released its annual report, The Cost and Benefits of Individual & Family Health Insurance. According to the report, the average premium paid for family health insurance plans in the United States in 2012 was $412 per month, a decrease of 0.5% compared to 2011; individuals paid average premiums of $190 per month, an increase of 3.8%. The average annual deductible for individually-purchased health insurance plans in 2012 was $3,079 for individuals and $4,079 for families.

        There is something seriously wrong with your health insurance plan if it is costing you $30k a year. There is something seriously wrong with Cedar Rapids health insurance plan if it costs $14,491 per EMPLOYEE, without family coverage.

      • November 29, 2012 at 3:36 pm
        FFA says:
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        I wonder how much more is going to cost when it becomes subject to the Affordable health care act. Whst do you think? Will it increase or decrease?

        • November 29, 2012 at 3:39 pm
          Libby says:
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          Decrease. More bodies insured, lowers pricing. Insurance 101.

          • November 29, 2012 at 3:48 pm
            FFA says:
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            I hope your right.
            Your therory assums more healthy people will get insurance. With the Tax being less then premiums, why should I get health inusrance until I need it?
            Insurance 101 was written before government intrusion. I have yet to see it rewritten to accomodate the new norm.

          • November 29, 2012 at 3:51 pm
            Libby says:
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            It’s the young and healthy that don’t buy it now. They don’t think they’ll need it. Remember being young and invincible?

          • November 29, 2012 at 4:49 pm
            FFA says:
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            “It’s the young and healthy that don’t buy it now. They don’t think they’ll need it. Remember being young and invincible?”

            And there is the flaw in the therory. People wont buy it till they need it. Soon as they are back in their feet, they will drop it.

  • November 29, 2012 at 3:24 pm
    FFA says:
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    “There’s more to this story that’s not being told”
    I believe you are 100% dead on the money with that statement.
    At the end of the day, its about getting cost under controll and this is the way they decided to go. Reduce everyones hours so everyone could keep their jobs.
    Its what the folks in IA voted for.
    I am sure there are more stories like this being written right now. Everyone including local munis have to adjust to the new normal. Its going to happen in your company. Its going to happen to the guy next door to you and me.

  • November 29, 2012 at 3:37 pm
    draetish says:
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    “McAlister said the requirement is especially hard on public employers because insurance premiums are usually lower for public employees and they’d be more likely to take the insurance.”

    Why are premiums lower for public employees? Health insurance rates aren’t based on type of employee.

    • November 29, 2012 at 3:52 pm
      FFA says:
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      Yet another curve ball in the equation. HMMMMMM. Maybe younger / healthier groups? Most public employees I see in my town are much younger especially the Pk District.

    • November 29, 2012 at 3:55 pm
      Libby says:
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      I think premiums are lower because the munis contribute more than private industry. Government work is famous for it’s benefits. Pay is not so great, but they make up for it with benefits. So instead of reducing people’s hours, how about increasing the employee contribution amount? That’s what my employer does.

    • November 30, 2012 at 10:12 am
      FFA says:
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      Sure they are. When I used to sell group health, they always asked for the SIC code. Health Insurance for a group of office workers is much less then a group of roofers given the same demographics. Some SIC codes were ineligible for certian carriers. Finding group health for roofers & tree trimmers was always a challenge.

  • November 29, 2012 at 4:52 pm
    Captain Planet says:
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    I wonder if this has something to do with the University of Northern Iowa, which is in Cedar Falls. It has been struggling for the last several years now. They have had to cut academic and athletic programs. It is a State University. Is this the trickle down effect yet again? I really don’t know how that all works, so perhaps someone can enlighten us. I do know the school is struggling. And, in college towns, where goes the college goes the town.

    • November 29, 2012 at 5:11 pm
      FFA says:
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      University finances should have nothing to do with the Local Muni Health Insurance plan. That would have more effect on the local business. Less students to buy less Starbucks would cause Starbucks a problem.

      • December 3, 2012 at 9:36 am
        Captain Planet says:
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        Most of the local muni workers are employed by the school. Perhaps it was the continued rising healthcare costs that were aiding in bringing down the athletic and academic programs. Now, those workers are brunting more of the premium? I don’t know, just a thought.

        • December 3, 2012 at 12:43 pm
          FFA says:
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          The University? Its a state school, they should be employed by the state.
          If such is the case, you could be on to something. None the less, it what they voted for.

          • December 3, 2012 at 1:30 pm
            Captain Planet says:
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            Yeah, the University. Again, I have nothing to support what I’m saying, I’m just spit-balling here. The rising healthcare costs came before the PPACA. I’ve been working in Iowa for a long time now and up until this year, I’ve always seen if not double-digit increases, at least something darn close to that. I don’t think that is Iowa-specific though. I imagine most on this blog would echo those types of increases over the past I don’t know, maybe decade?

          • December 3, 2012 at 2:01 pm
            FFA says:
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            I would. Over $1200 @ month for me & the wife up from $770ish when I was paying cobra 12 months ago. Not sure where my one empkoyee was at on his Cobra, but his charge on the current bill is $1000+ of which carrier says I have to pay half. Thats with a $10K ded too.

            I was told that oBama Care does away with HSA too. Dont know for sure, but thats quite a bummer if it does.

          • December 3, 2012 at 2:02 pm
            Libby says:
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            Why does the carrier have a say in how much the employer contributes? That doesn’t seem right to me.

          • December 3, 2012 at 2:50 pm
            FFA says:
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            Libby, not sure. Thats just the way it is. Thats the way its always been. Some used to allow as low as 25%. But that is history. Not sure what Obama Care had to do with that adjustment if any thing.

            Now that you realize the true impact, you now understand why this is bad for business and bad for jobs??

          • December 3, 2012 at 3:06 pm
            Libby says:
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            Doesn’t seem American to me, but I’m a P&C gal.

          • December 3, 2012 at 3:23 pm
            FFA says:
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            A P&C gal whos customers may not be able to afford this and close their doors there by eliminating the need for business insurance and a rep (you)?

          • December 3, 2012 at 3:32 pm
            Libby says:
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            That’s not the reason companies are downsizing and closing their doors. Obamacare is still in the infant stages and anyone closing their doors now and blaming Obamacare is using it as a excuse for a slow economy &/or poor management.

            This article is about increased healthcare costs which has nothing to do with Obamacare. Healthcare costs have been steadily rising for years now. Quit blaming Obama.

  • December 3, 2012 at 3:55 pm
    FFA says:
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    So, no. You dont see how this would adversly effect the bottom line of a business and its ability to stay in business and turn (yes that dirty ittle word) a profit.
    Even when your clients tell you this is the reason they are down sizing / closing up shop, wuld you believe it then? Or would you believe it when your boss tells you to hit the unemployment line?

    • December 3, 2012 at 4:07 pm
      Libby says:
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      I haven’t had any clients close down because of Obamacare or healthcare costs. They have all closed their doors because the economy sucks or they have poorly managed their business. The requirement to provide coverage does not kick in until 2014. Before then, an employer can decide to discontinue offering healthcare benefits. And there are so many people out of work, he wouldn’t have any problem replacing those who might move on because of it.

  • December 3, 2012 at 4:20 pm
    FFA says:
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    Me either – yet. I know its coming. There were many before the election that stated this was going to happen (Cedar Falls). I sure there are many more to follow. I knwo I’ll never hire over 30 hours again.

    • December 3, 2012 at 4:24 pm
      Libby says:
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      There have been Chicken Littles forever. Always crying the sky is falling. They’ll take one instance and blow it up into a frightening trend. Most employers with over 50 employees already offer healthcare benefits. Those with under 50 are exempt. Not a big deal from my perspective.

      The increase in payroll tax could be of concern, though. I see this as a positive, as it gives everyone (not just those with employer provided coverage) and avenue to purchase healthcare and a mandate, as well.

      We just need to wait and see. It’s going to happen, so we need to watch closely and see what works and what needs to be changed.

      • December 4, 2012 at 1:43 pm
        FFA says:
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        Libby, its a one word answer. Yes or no are the only answers.
        Can you see how this has the potential to be a hinderance to Business and to job growth?

        I would also venture a guess that to these 59 people, it is a big deal.

        • December 4, 2012 at 1:55 pm
          Libby says:
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          I have yet to see it.

          • December 4, 2012 at 2:14 pm
            FFA says:
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            That was not the question. The question is – do you see how this could have a negative impact on Jobs & Business in general.
            You very smart as you have stated previously. Also, the repubs should have had you run as you seemingly know how to duck the question.

            So, just to be clear, the Answers are Yes or no. The question is – do you see how this could have a negative impact on Jobs & Business in general.

          • December 4, 2012 at 2:15 pm
            Libby says:
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            Yes, I see how it could. But I haven’t seen that it has. Is that good enough for you?

          • December 4, 2012 at 2:33 pm
            FFA says:
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            Yes.

  • December 4, 2012 at 9:39 am
    draetish says:
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    “McAlister said action is required now because the law has a look-back period that determines who is eligible. Although that period can be as short as three months, the city wants to be sure seasonal employees don’t qualify.”

    It appears by the above statement that this does indeed have to do directly with Obamacare.

    • December 4, 2012 at 1:45 pm
      FFA says:
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      It does not appear so, it is stated right in the article this is a direct result of OBama Care. If not for Obama care, these people would continue to hold their current hours.

      Because of Obama Care, they will now be under employed.



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