1/31/2014 6:00:00 AM Kingman company rolls with health care changes Affordable Care Act a key consideration
Erin Collins, standing, discusses health care issues with his staff at ECA Inc. in Kingman. The staff are, seated from left, Liza Noland, Terri Williamson, Noreen Kurtze, Brandy Rossiano, Elena Lacy, Kelly Mooney and Jaime Schulenberg. Not shown is Kevin Connelly. The company is currently hiring two more employees to help it keep up with health care reform. (KIM STEELE/Miner)
KINGMAN - Liza Noland still chuckles when she recalls the questions walk-in visitors have asked over the years about the business conducted at the small office of ECA Inc.
"It doesn't happen often, but we've had a few people come in thinking we carry car insurance or are a law office," said Noland, marketing coordinator for the company. "I think there's just a lack of knowledge about what a broker does. I had to ask five people about what the company does when I applied for a job here, so it doesn't surprise me that other people don't understand."
If they did comprehend the job of ECA Inc., which was renamed in January from Erin P. Collins & Associates, Inc., they might be surprised. The little company located in Suite 101 at 1115 Stockton Hill Road is one of Arizona's employee benefits consultants, specializing in self-funded employee benefit portfolios and workplace wellness and disease management programs.
With ongoing health care reform, especially the recent implementation of the Affordable Care Act, the need for ECA Inc.'s consulting services has grown dramatically in Arizona. Because of increasing health care costs and changes in coverage, the insurance services that used to appeal to companies with 500-plus participants are now finding a home among companies and government entities with 100-plus plan participants.
Founded in 1992 by Erin P. Collins, ECA Inc. offers insurance coverage and wellness programs to about 40,000 people in every county throughout the state, including cities, counties, schools, long-term care facilities, fire districts and doctors' offices. Locally, ECA Inc. consults for and covers the employees of Mohave County, Creative Care and the cities of Kingman, Lake Havasu City and Bullhead City. It broke into the Phoenix market in 2012.
"When I started this business as Erin P. Collins and Associates at my kitchen table, it was just me and my kids," said Collins, noting Jessica, 11, and Theresa, 9, were the associates. "Now we're adding our 12th employee. It's a local story of evolution, change and growth. We're not the same company we were back then, and we have to anticipate the changes that may take place. If we're only reactive, we're dead."
Collins, who has a master's degree in public administration from the University of Idaho, worked as personnel director and personnel risk manager for Mohave County for several years before branching out on his own. Today, his company works with clients to develop insurance plans that meet their needs and help them recruit and retain qualified employees as part of a compensation package.
ECA Inc. also provides consulting on workplace wellness and disease management programs, incorporating early detection, lifestyle choices and chronic disease management. And because of recent health care reform, it offers education and guidance about government legislation and regulations and how clients can prepare and protect themselves.
"Challenge and opportunity go hand in hand," said Vice President Norene Kurtz. "How do our clients stay competitive? We look at everything, put a dollar amount on it and show them how to keep health care affordable and accessible. Health care is personal. It's not just a number. Our job is to give our clients all the options and show them what can work best for them."
Those options mean different things to each client. For example, three of Arizona's smallest rural counties, each experiencing financial pressure on their self-funded benefit plans, looked to ECA. Working with their senior management staff, ECA assembled the Arizona Local Government Employee Benefit Trust for Graham, Greenlee and Santa Cruz counties.
Almost two decades later, growing to six counties with the addition of La Paz, Apache and Gila counties, AZLGEBT has become one of ECA's most established self-funded pools, touting more than $9 million in surplus and an average of less than 7 percent annual medical premium increases.
In another case, Creative Care in Kingman selected ECA as its consultant in 2013 to help chart a course for employee benefits that would allow it to continue to attract and retain staff in a cost-effective manner. The nursing home, assisted living and residential Alzheimer's care market is known for being highly competitive, regulated and costly, and Creative Care wants to remain a player in the game.
ECA has started negotiating renewals and examining alternative financing structures for Creative Care's employee benefit plans, and is assessing the company's approach to benefits in light of statutory and practical mandates associated with health care reform. Creative Care has 125 plan participants.
In another case, officials in Parker, Winslow and Holbrook began looking for alternatives after receiving huge renewal increases from their traditional insurance provider. ECA Inc. conducted a study to determine the benefit of forming a regional employee benefits pool. Based on the results, the cities and towns joined in 2002 to form Rural Arizona Group Health Trust. Today, the trust has 17 rural entities with about 1,000 employees, a surplus of about $7 million and an annual medical premium increase of less than 3 percent.
The Affordable Care Act has changed health care as the country knows it, said Collins, and for ECA, that will mean adding more employees over the next five to 10 years to deal with those changes.
Because of the complexity of the ACA, Collins expects to see more small companies drop their insurance coverage and send their employees to the health care marketplace to purchase their own policies. And he won't be surprised if more large companies move to self-funded programs.
Collins said health care reform is evolving, with legislation and corresponding mandates changing rapidly. The biggest challenge for employers who have used benefit plans to attract and retain quality employees in the past will be differentiating themselves if the medical exchanges become more popular and those employees begin preferring them.
The biggest challenge for ECA Inc., said Collins, will be to navigate clients through all their options while balancing costs and building a competitive benefits package.
"We deal with policies and economics, and we can't sit there wishing this away," said Collins. "Health care reform is here to stay. Long term, it's going to be expensive because the ACA adds more costs and has a lot of tax consequences. For us, we're going to continue to let the politicians sort this out while we partner with our clients to keep their plans affordable."
Posted: Monday, February 3, 2014
Article comment by:
Correction: For the $1,000 of premium spent to insure a family of four in Kingman, the pre-tax out of pocket cost would be:
$350 from employer
$250 from you. (assuming a 75/25 split of the premium and the tax credit figured at next year's 50% level).
Posted: Monday, February 3, 2014
Article comment by:
Sure. Suppose you work as a mechanic in an auto repair shop that employs 10 people full time averaging less than $50K per year. You and your spouse are both 45 and you have two kids 15 and 13.
A middle of the pack O-care compliant policy for your family should cost around $1,000 per month in Kingman. Let's say your employer pays 75% of the premium, $750. O-Care this year will pay your employer $250 a month in a tax credit. That's not a deduction its dollar-for-dollar reduction against your employer's taxes. Next year it goes to $375 credit. The remaining $375 is still deductible as a business expense. Your contribution is still pre-tax. So the net cost to insure your family is $525 pre-tax dollars.
Posted: Sunday, February 2, 2014
Article comment by:
Mr. Harper - Please explain what your tax credit means in dollars a cents in my tax obligation. Do I have to add the 50 % to my tax burden with the employer deducting theirs or is this smoke and mirrors? Please give the bottom line. Use a $50,000 a year salary and 3 dependents before and after Obama care if you would.
Posted: Saturday, February 1, 2014
Article comment by:
Does this guy know straight up? "Collins expects to see more small companies drop their insurance coverage and send their employees to the health care marketplace to purchase their own policies."
Under Obamacare, small businesses with 25 or fewer full time employees averaging $50,000 or less in salary will receive a 35% tax credit for the employer's share of the group health insurance cost. That goes up to 50% next year. Of course, the remaining costs are tax deductible as they have ever been.