College says Obamacare repeal funded employee bonus. An expert says that’s unlikely

The College of the Ozarks announced Friday that savings prompted by the recent GOP tax bill will allow the college to give its employees a one-time bonus this month.

$204, that is.

“We were expecting to have to pay the extra amount in Obamacare costs,” college President Jerry C. Davis said in a statement. “We are grateful for this savings and want to pass it along to our hard-working employees. It is a simple, but tangible, way to express our appreciation to them.”

In a statement released by the college on Friday, school officials cited the elimination of the “Obamacare mandate provision” as the reason for the savings.

But that’s a claim experts familiar with the law say isn’t plausible.

“They are way out in front of actual information, as far as I know,” said Nancy Kelley, the Missouri Foundation for Health’s Obamacare enrollment expert. “To me, it sounds like perhaps they’re making a lot of assumptions that we just don’t know yet.”

The college said that elimination of the Obamacare’s individual mandate provision reduced the college’s 2018-19 Blue Cross Blue Shield premiums by about 2.7 percent.

But the repeal of that mandate requiring most Americans to have health insurance does not go into effect until 2019. Even when it does, employers who have 50 or more workers will still be required to provide insurance under the law’s employer mandate.

Kelley said premium rates for individual Obamacare plans for 2018 have already been set for months and premiums for 2019 plans won’t be finalized until the fall. So the GOP tax bill couldn’t have had any effect on 2018 premiums and its effect on 2019 premiums is, at this point, speculative.

She said the college may have been able to renegotiate its group insurance rates, but it’s hard to see how any reduction there would be related to Obamacare, which is formally called the Affordable Care Act.

“People negotiate their group plans all the time... but that is not, in my understanding, directly related to the ACA or certainly the repeal of the mandate,” Kelley said. “It’s hard to just put a cause and effect there.”

Anthem Blue Cross Blue Shield did not respond to a request for comment.

In a phone interview Friday, Rick Hughes, the college’s vice president and chief financial officer, said the insurance company didn’t say the discount in premiums was related to the repeal of the Obamacare mandate. But the college is getting a discount and school officials believe it’s because Anthem will have lower costs in the federally subsidized individual market once the repeal kicks in.

“The mandate itself is going away and it is believed by the people I’ve spoken to in the insurance industry that the amount of the subsidies is going to decrease,” Hughes said.

Health policy experts have said that the repeal of the individual mandate could cause premiums to rise nationally because young, healthy people will be more likely to opt out of the insurance market, making the pool of insured Americans older and sicker.

The college’s news release said the $204 checks would be given to permanent, full-time employees this month.

This story was originally published January 19, 2018 at 3:48 PM with the headline "College says Obamacare repeal funded employee bonus. An expert says that’s unlikely."