Obama compromise is no compromise to self-insured
In what President Barack Obama called his "compromise" on his Health and Human Services health care mandate, the requirement to provide free coverage for contraceptives and some abortion-inducing drugs -- considered by the Obama administration as "preventive services" -- was switched from employers/policyholders to their insurance providers.
Many Americans, including the U.S. bishops, consider this no compromise at all, reasoning that, as the saying goes, there is no free lunch. Costs, they explain, would be passed on to the customer, that is the employer who pays for the insurance coverage.
In the case of the Archdiocese of St. Louis, the effect would be even more direct. The archdiocese, like many businesses and nonprofit organizations, is self-insured. The archdiocese is its own insurance company.
"We provide the administrative services for our self-insured clients. We charge an administrative fee," explained Dr. Robert W. Smith, market medical director of United Healthcare of Missouri and Southern Illinois, the third-party administrator of the archdiocese's health insurance. "While the self-insured employer determines what kind of coverage it will offer its employees -- including what clinical care is and isn't covered -- our role is to negotiate rates with providers on the employer's behalf, process claims and provide customer service to the employees and their covered dependents."
Kevin Loos, managing director of human resources for the St. Louis Archdiocese, said, "An insurance company basically is paid so much (in premiums) and assumes the risk" of covering the health care of its clients. "Because the archdiocese is self-insured, we assume the risk. The only fees we pay are the administrative fees. United Healthcare, our third-party administrator, negotiates favorable rates and processes claims, and we pay them an administration fee for that service."
This is not an unusual system, Loos said. "My rule of thumb is, once you have 100 employees you should probably be self-insured. That's kind of the break-even point, financially. The Archdiocese of St. Louis has 3,856 employees and 3,376 dependents" under its self-insurance coverage.
"There is no separate insurance company for the archdiocese," Loos repeated. Under the health care mandate, "We would have to pay for (contraception). In essence, the archdiocese would be a provider of contraception."
Loos said forcing the archdiocese to pay for something the Church considers immoral is an attack on religious liberty.
"This is not about being judgmental about an employee who personally elects to use contraception. We do not cover it in our insurance plan. It's one thing if you or I, as individuals, commit a sin. It's another if the archdiocese creates an environment for committing the sin -- we (the archdiocese) become accountable for that sin," Loos said. "In addition, the archdiocese does not get reports of why its employees (covered by its insurance plan) go to the doctor. We do not see the records. All the bills go to the third-party administrator."
Loos and Smith both said that for now nothing is certain. Smith said, "United Healthcare is reviewing the recently issued guidelines from the U.S. Department of Health and Human Services, which will allow some employers to opt out of paying for contraceptive coverage. As always, United Healthcare will continue to work with its customers to meet their coverage needs and comply with federal law."
"Right now we don't know what will happen," Loos said. The current legislation is in a period of comment related to the interim regulations until final regulations are available, Loos said. "While most legislation receives limited input during this period, Congress and the Executive Branch have received thousands of pieces of feedback from concerned voters. We will continue to work closely with our insurance broker and legal counsel to assess impact on our plan.
"As the nation's bishops and many other religious and civic leaders continue to fight the contraceptive mandate, if the Obama administration were to achieve its goal of requiring contraceptive coverage be provided to all employees, in essence, the Archdiocese of St. Louis would be forced to be a provider of contraception," Loos said.
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