Two companies that employ baggage handlers and other workers at Miami International Airport forced employees to sign up for company-sponsored healthcare plans and pay part of the cost from their hourly wages even if the workers already had coverage through an outside source such as a spouse or the military.
Workers at the two companies, Ultra Aviation Services and Eulen America, were automatically enrolled in the employer plans starting Jan1.
But one of the companies is now reconsidering. “A group of employees came to us over the holidays with concerns that they would have to give up outside coverage,” Susan Potter Norton, an attorney for Eulen America, said Wednesday.
Norton said Eulen America’s employees had been forced to move onto the company plan for 2015 but said that the “decision is being revisited” and employees may be allowed to go back to their old plans.
In an email to the Miami Herald, Nikole Augsten, director of human resources for Ultra Aviation Services, wrote that the company required employees to join its health plan because “under the Affordable Care Act, a company of our size with no prior health insurance offering is put in a difficult position trying to offer the best possible plan while abiding by multiple sets of regulations,” including Miami-Dade County’s living-wage requirement.
In letters sent last month to employees, both companies suggested that provisions of the ACA, popularly known as Obamacare, required them to force employees onto the company plan.
But that’s not true, said JoAnn Volk, project director at the Georgetown University Center on Health Insurance Reform. The health law requires companies over a certain size to offer adequate coverage but it does not require that they force workers onto those plans, according to Volk.
“In these cases, it certainly doesn’t seem like the best outcome for individuals who feel they already have better coverage,” Volk said.
One employee at Ultra Aviation Services, who did not want his name published because he feared losing his job, said he was forced to give up outside coverage to enroll in the company’s plan.
“The new plan is not as good as what I had,” the employee said.
As a result of moving onto employer plans, workers at the two companies have seen their hourly wages drop by $1.81, money now being used to pay for the employer-sponsored health plan.
In a Dec. 8 letter, Livan Acosta, Eulen America’s chief operations officer, told employees that the county had contributed a wage subsidy of $1.81 per hour for employees to buy healthcare.
“However, the Affordable Care Act now requires employers like Eulen America to offer health insurance, and so that county subsidy money now will be redirected to pay for your medical coverage,” Acosta wrote.
Miami-Dade County’s living-wage ordinance requires that eligible employees who receive a qualified health plan make a minimum of $12.46 per hour. Those without benefits must make at least $14.27.
Several new federal requirements are changing the way employer-sponsored healthcare works. One, the so-called “employer mandate,” says that in 2015, employers with more than 100 full-time workers (those who work 30 hours per week or more) must offer an adequate health insurance plan to at least 70 percent of those employees.
If a company fails to do so, and at least one employee receives a subsidy on the federal exchange, then it will face a financial penalty.
Meanwhile, the “individual mandate” states that people who don’t acquire medical coverage for 2015 will face a penalty of $325 or 2 percent of household income, whichever is greater.
But neither provision means that companies must force employees onto a plan, experts say.
In general, the more employees join an employer-sponsored healthcare plan, the cheaper the cost for the company. So this may be a move to reduce costs, said Steven Ullmann, a healthcare expert at the University of Miami.
“The possibility is that the companies are looking for a larger pool of employees to reduce risk and reduce costs, especially if those included in the risk pool are indeed healthier, ideally younger individuals,” Ullmann said.
But Norton said the change “was merely an intent to comply with the law and provide coverage for our employees.”
Companies are allowed to force workers onto employer health plans as long as the plans are affordable and provide essential minimum benefits, according to federal regulations.
“The Labor Department doesn’t enforce any laws that prohibit an employer from requiring participation in a company’s health plan as a condition of employment,” said Laura McGinnis, a spokeswoman for the U.S. Department of Labor.
In a letter to Ultra Aviation’s employees dated Dec. 9, Augsten acknowledged that the new policy might be unpopular with workers.
“We realize many of you would prefer to continue receiving cash … rather than healthcare coverage and we apologize for any hardship this change may cause you,” Augsten wrote. “However, rest assured Ultra Aviation will provide you with the best coverage available for your living wage dollars.”
Officials at Miami International Airport, which is run by the county, have no concerns about mandatory employer health plans because they are a private labor issue, said Greg Chin, a spokesman for the airport.
“As far as the county is concerned, the companies are meeting the living-wage requirement because they are paying at least $14.27 per hour in total,” Chin said.
“Our only concern is that the companies meet the living-wage ordinance,” he said.
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This story was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.