Affordable Care Act Mandates Scare Some Youth Orgs, Others Say They’re Ready

by Ryann Blackshere and John Kellly

The deadline for large employers in the youth and family services field to comply with the mandates of the Patient Protection and Affordable Care Act (ACA) is nearing. It is surely an issue far from the front burner for most organizations, as they face the short-term threat of federal spending cuts that will undoubtedly effect state funding for human services.

ACA has the potential – particularly in states that expand the reach of Medicaid – to connect more poor Americans with the physical and mental health services championed by youth and family services providers. For example, it guarantees in-state Medicaid eligibility until age 26 for teens who turn 18 while in foster care.

The act will also demand that the larger providers in youth and family services guarantee benefits to their employees at a time when many of them face financial uncertainty in the government fees-for-service market.

And they’ll have to do it soon. By January 2014, any organization with the equivalent of 50 full-time employees must offer affordable health care package to full-time employees or pay serious financial penalties.

With nine months before the deadline, nonprofit leaders say most organizations have not decided how to handle ACA, or have even determined whether they need to.

“I have not heard a single nonprofit person tell me they’re spending a lot of time on the Affordable Care Act,” said Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins University. “I don’t know if the field has really figured this out.”

But some organizations report that they are indeed preparing for what is to come.

“All of our members are paying attention to it,” said Katherine Astrich, senior vice president of public policy for the Milwaukee-based Alliance for Children and Families and United Neighborhood Centers of America (UNCA), two national organizations with a network of members representing human service organizations and neighborhood centers. “Most of them are taking proactive steps to do something about it.”

A good harbinger: several large youth services providers tell The Imprint that they are confident their current benefits packages will meet the ACA standard of affordability.

Management at major youth service providers Eckerd Youth Alternatives (Fla.), Children’s Villages (N.Y.), and Hillsides (Calif.) all said that their health benefits will meet ACA requirements.

“We don’t see [the Affordable Care Act] impacting us as an employer too much,” said Ryan Herren, executive director of Hillsides in California, one of the state’s largest providers of residential and community-based services, with 425 full-time employees.

“We are not anticipating much, if any, impact of ACA on us from an employer perspective,” said Eckerd Chief Personnel Officer Tony Moore, whose organization employs 550 full-time employees and provides child welfare and juvenile justice services in six states. “According to our insurance advisors, our current health insurance plans already meet all requirements of the ACA.”

Those conversations have not gone as swimmingly for everyone. Jeff Fleischer, CEO of the Harrisburg, Penn.-based Youth Advocates Program (YAP), said that meeting ACA’s requirements may require the organization to double its health care costs and increase the amount that currently-insured YAP employees pay for their benefits.

The reason may be a situation other direct service organizations run into. YAP has a large number of employees that, for its own purposes, are considered part-time employees. They are integral parts of the model: front-line, paid youth workers in 18 states that engage youth referred from the child welfare and juvenile justice systems.

YAP’s frontline staff often clock more than 30 hours per week, which means for ACA purposes, YAP must provide coverage for them or face financial penalties.

“We support health care reform and I think the nonprofit sector in particular needs some special consideration during implementation so we can be sure that we increase and improve access to healthcare for all Americans, including the most vulnerable youth, without increasing costs for organizations and employees who work in the nonprofit sector,” Fleischer said.

Most Alliance and UNCA members are “at the point of running the numbers,” said Astrich. “And the numbers have been scary for some of them. We’re hearing from several who are getting estimates of big increases in what it would cost to provide coverage.”
One UNCA member determined that by not complying with ACA, and simply dropping employer-sponsored coverage altogether, they would save between $300,000 and $400,000.

“That’s a lot of money for a community-based nonprofit to turn down,” said Astrich.

The organization is considering the option of taking the penalty and using the savings to provide health care payments to each worker to obtain their own coverage.

The option speaks to another uncertainty for the field’s largest employers: the future of employer-sponsored coverage.

“There are some wondering whether employer-sponsored insurance is on the way out as a model,” Astrich said. “If the exchanges truly make care more accessible, then is employer-sponsored insurance going to become obsolete? But I don’t know anyone in our network that would abandon [employer-sponsored coverage] without knowing employees had somewhere else to go.”

Ryann Blackshere is a reporter for The Imprint, and John Kelly is the Editor-in-Chief.

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