The executive director of New York state’s substance use provider association was speaking last week with a provider who is organizing an upcoming regional conference for mainly rural facilities, and the prevailing topic will be the Affordable Care Act (ACA). The group does not want to focus the discussion on the ACA’s impact on client services, however, but rather on the question of how the ACA might affect decisions about the employer-sponsored health insurance that addiction treatment facilities purchase for their workers.

John Coppola says that while providers already are openly asking whether the health insurance exchanges under the ACA offer a viable option for their employees, he adds that he gets no sense that facility administrators are rushing into their decisions about insurance coverage if they don’t have to.

“Most of the people running addiction treatment centers aren’t [human resources] people,” Coppola, executive director of the New York Association of Alcoholism and Substance Abuse Providers, Inc., told ADAW. “The smaller facilities don’t even have HR departments. In those facilities, there are executive directors who still have a caseload.”

Addiction treatment facilities have long awaited the influx of patients they expect to see as a result of expanded insurance options under the ACA. But the other hat they of course wear is that of employer, and so they are seeking to determine whether the ACA will or should result in dramatic changes in how (and for how much) their workforce is covered for health insurance.

Coppola does not believe providers in his state will look to get out of the business of insuring their employees and steer them instead to the exchange. In fact, he said a greater preoccupation for New York’s state-funded treatment facilities lately has been the lack of a cost-of-living adjustment in provider reimbursement for the fourth consecutive year in the state budget.

“I don’t think there will be any kind of opportunistic effort for providers to get out of their obligation,” Coppola said.

Weighing options

The director of operations at Ocean Mental Health Services, which provides community-based addiction and mental healthcare in New Jersey, terms the current period “the quiet before the storm” for behavioral health providers that are not moving too quickly on employer-sponsored coverage decisions. But Susan Loughery, who oversees human resources as part of her job, adds that there are factors that could point organizations such as hers toward restructuring some licensed clinical positions into contractor rather than employee roles.

She attributes this to both the ACA and activity in New Jersey involving the state’s planned move to an administrative services organization (ASO) for community-based behavioral healthcare. Under the state’s managed care plan, while some services such as housing and targeted case management will be managed by the ASO, other services eventually are scheduled to start as partial-risk and then transition to a fee-for-service structure.

“We’re structured for a contract program,” Loughery said. “Under fee-for-service, you don’t have a lot of wiggle room for fringes and G&A.” As a result, she said, “We’re going to need to shift to more of a contracted relationship with some of our licensed clinical staff.”

Loughery said her organization generally has until the start of the next fiscal year in July to decide whether it will direct staff members to the insurance exchanges. She said it is conceivable that organizations such as hers could offer more competitive salaries if they decided to shed the burden of offering health insurance.

But she added that it is also possible that in this period of uncertainty, some staff members in community-based organizations may seek to jump ship in favor of employers where they potentially see more benefit stability, such as hospitals.

Cost factors

Gerry Schmidt considers his West Virginia addiction and mental health services agency, Valley HealthCare System, a bit of an anomaly in the state’s behavioral health community. While smaller provider agencies in his state are definitely expecting their employer-sponsored insurance costs to continue to rise (and their decision-making about benefits to grow increasingly complex), Schmidt sees stability ahead for his organization of 500-plus employees.

In fact, the chief operations officer of the organization told ADAW that although it had budgeted for a 28 percent increase in insurance costs for the plan year that began Oct. 1, its health plan actually ended up being renewed at a 10.5 percent decrease. This largely resulted from a lower occurrence rate among employees, which Schmidt attributes to a stepped-up wellness/prevention focus in the organization.

“I’ve been here 33 years, and this is the first time we’ve seen a reduction in our insurance premium,” Schmidt said. The organization has been with its present insurer for about five years and had worked with it at one time in the past as well. Valley HealthCare System pays 70 percent of the insurance premium cost, and its employees pay 30 percent.

Schmidt said that during conferences he attended this past spring and summer, he sensed a great deal of uncertainty among staff members of other treatment programs over how their employers would proceed on coverage decisions.

“I’ve heard folks in smaller organizations saying, ‘I have a feeling that my employer will pay the fine rather than pay for coverage,’” he said.

He added that while employees in his organization generally wouldn’t be eligible for subsidized coverage in the exchanges based on income levels, this could be an option for more entry-level-type titles in the field, such as recovery coaches.

In terms of attracting and retaining workers, Schmidt believes the factors that resonate the most are usually based on the age of the worker. The youngest workers simply want more cash in their hands and usually aren’t particularly interested in the scope of their health insurance benefits, he said.

But while some providers may be tempted to exit employer-sponsored insurance as a way to address their longstanding desire to offer more competitive salaries, Schmidt sees both benefits as important to an organization’s competitiveness. “It makes us more attractive to have a good balance between benefits and salary,” he said.

Bottom Line…

Smaller addiction treatment organizations may be tempted to consider getting out of the employer-sponsored insurance business under health reform, but few appear to be rushing into any firm decisions yet.