Agricultural businesses and the insurance companies that serve them are scrambling to prepare for the changes that health care reform will bring over the next few years.
Many smaller farmers struggle with the details of the Affordable Care Act, such as how to count seasonal farmworkers to determine who they must insure. Employers of more than 50 will face fines if they don’t insure eligible workers.
Meanwhile, three of California’s agricultural-focused health insurance providers required waivers from ACA rules to continue operation. Those waivers expire next year.
“There is a lot of confusion,” said Norm Groot, president of Monterey County Farm Bureau. “I think everyone is really put off with the amount of complexity, particularly for agriculture.”
The farmworker insurance groups United Agricultural Benefits Trust, Western Growers Assurance Trust and the United Farm Workers’ operated Robert F. Kennedy Medical Plan. Each received waivers to continue operating until 2014 despite failing to meet Affordable Care Act rules.
Each of the plans had annual caps on coverage that are forbidden by the ACA.
Those caps help keep the plans and access to health care affordable for low-wage workers, said United Agriculture Benefit Trust President Richard Schmidt.
The United Farm Workers’ plans and the Trust’s packages both charge low copays for doctor’s visits and prescriptions, ranging from $5 to $15 depending on the plan. To offset the savings, the United Farm Workers limits annual benefits to $70,000 and the Trust plans have $50,000 and $100,000 caps.
Under the ACA, insurers must end coverage limits for essential health services. That’s not necessary for the many seasonal, temporary workers in California fields, Schmidt said.
“These annual cap plans have been plenty adequate,” Schmidt said. “Because many of these people work seasonally, these plans and the caps were designed to support them.”
Only 1 percent of workers enrolled in the Trust’s $100,000 limit plan have gone over that annual allotment.
But when the health insurance overhaul was debated and created, one of the biggest problems lawmakers hoped to solve was insurance that left people broke when faced with a catastrophic illness or accident. The prohibition on lifetime and annual coverage caps was intended to help prevent that.
“We all know that the lack of health care (coverage) is the leading cause of bankruptcy,” State Sen. Bill Monning said to an audience of businesspeople during a district meeting outlining the purpose and processes of the ACA. As an assemblyman, Monning helped create the legislation to implement portions of the health care law in California.
Still, Schmidt believes the new plans will be too expensive. The Agricultural Benefit Trust will move its customers to a plan that meets the ACA’s basic guidelines once the waiver runs out.
Schmidt estimates that rates will go from $100 to as much as $500 a month. Workers will no longer have low copays, he said. Rather the insurance plan will pick up costs after workers meet a $5,000 deductible.
But much remains in flux. For example, Schmidt’s group and others are lobbying for an extension to the waivers.
The high percentage of undocumented workers in agriculture doubles the problem, Schmidt said. He believes that growers and labor contractors will feel pressure to provide expensive health insurance to immigrants who don’t qualify for assistance under the ACA. That’s because the businesses don’t want to be exposed for hiring illegal workers if they seek assistance elsewhere.
Groot is most worried about small farmers – who may be classified as large employers because of the size of their seasonal workforce and the length of their growing season.
“It’s particularly hard for them because they don’t have the large HR and benefit departments that bigger growers do,” Groot said.
Under the Affordable Care Act, those that employ 50 or more workers – or the part time and seasonal employee equal to 50 employees – will have the choice to either provide health insurance or pay a fine starting in 2015.
Seasonal employees who work more than 120 hours are counted as full-time, regular workers. That’s particularly important in agricultural, where some regions’ growing season, including the Salinas Valley, last longer than four months.
If a labor contractor finds the workers and brings them to a farm, the contractor is responsible for providing insurance or paying the fine. It’s a move that contractors estimate could add $1 an hour to labor costs, Groot said.
Groot has promoted meeting on the ACA to get the word out to operators of smaller farms, including the recent meetings with Monning and officials from Covered California.
Monning told the audience at one of the meetings that the new rules would be “transformative” to health care.
“As small business employers, the workplace also becomes the site for the promotion of health and wellness” because of expanded insurance, Monning said. Workers will miss fewer days to illness and generally be better cared for.
Still, it’s the process of getting to transformation that worries many, because there are many unanswered questions, Groot said.
“We are just trying to let people know what we know as soon as soon as we know it,” Groot said.