Health Care Reform, Exchanges, and School Culture

Vol. 11 No. 9


When health care reform (aka, Obamacare or PPACA) was first passed in 2010, the year 2014—when perhaps the biggest change brought about by the law, the creation of state-run “exchanges,” would first come into place—seemed well in the distance. We find that it is only months away. As these changes approach, many schools wonder uncertainly, “What should we do? What can we do?”

Many qualified experts (including ISM’s Insurance Division and other brokers) exist to help guide you through the ongoing maze of choices (financial and otherwise). For purposes of this article, we’d like to share with you a strongly held opinion of the one option you should not pursue regardless of finances. That is, if you have an existing, robust (or even not-so-robust) benefits program, do not disband it in favor of potentially saving a few dollars by withdrawing coverage and pushing your employees toward the exchanges (and absorbing the corresponding penalties).

For many years now, ISM has considered employee benefits to be a key measure in assessing the health and sustainability of a private-independent school. We’ve encouraged schools to provide their faculty and staff with the most robust benefits plans they could reasonably afford. This is not so that teachers can have gold-plated benefits. Rather, it is simply for cultural reasons—i.e., a well-developed benefits plan says a mouthful without saying a word: “We care,” “We support you,” and “We want to help you protect the physical and financial health of your family.”

Health care reform changes none of this. Promoting a culture of caring and support for your faculty is as vital today as it has always been. By cutting or eliminating benefits in favor of the exchanges, you’re doing away with all of the goodwill that your benefits plans have “bought” you over the years. Years from now, health care insurance may shift from employer-provided to government-provided (of which the exchanges are a start). When and if that time comes, it will be necessary to re-evaluate our stance, as faculty and staff expectations will likely have shifted as well.

For today, for the upcoming school year, and for the foreseeable future, employer-provided health care insurance is the order—and expected—benefit of the day. Don’t put this at risk for the chance to possibly save a few dollars. As Ben Franklin noted, “Penny wise and pound foolish” is not the route to long-term, sustained success.

Additional ISM articles of interest
Private School News Vol. 11 No. 4 Health Care Reform 2013-2014
ISM Monthly Update for Business Managers Vol. 10 No. 8 Rises in U.S. Health Care
Private School News Vol. 11 No. 5 10 Major Concerns for Health Care Reform After Supreme Court Ruling
Private School News Vol. 11 No. 5 Health Care Reform and the Effect on Health Flexible Spending Accounts and Health Reimbursement Arrangements
ISM Monthly Update for Trustees Vol. 10 No 4 Finding Savings in Your Health Insurance Plans

Additional ISM articles of interest for Gold Consortium members
I&P Vol. 35 No. 7 Health Care Reform: What Schools Need to Know Now

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