O.K. Industries granted waiver under new health care law
by November 18, 2010 2:30 pm 69 views
Add Fort Smith-based O.K. Industries to the list — now standing at 111 companies — of companies and organizations granted a waiver on a specific rule within the newly enacted federal health care law.
The waiver, granted by the U.S. Department of Health & Human Services, will allow 1,238 O.K. employees to continue choosing between two health insurance plans offered by the company. O.K. Industries is the holding company of a regional poultry processing plant with farms and operations in eastern Oklahoma and western Arkansas.
The 111 companies with more than 1.175 million employees had to prove to officials within a DHHS oversight office that complying with the new health care law would immediately decrease choice and increase costs.
“As set out in the September 3, 2010 Bulletin, the IFR implementing Section 2711 of the PHSA provided that the restricted annual limits may be waived by the Secretary of HHS if compliance with the IFR would result in a ‘significant decrease in access to benefits’ or a ‘significant increase in premiums,’” noted a section of the waiver instruction.
Companies on the waiver-approved list with O.K. Industries include Darden Restaurants (with operations including Red Lobster, Olive Garden, Longhorn Steakhouse, 34,000), O’Reilly Auto Parts (9,722 employees), Service Employees International Union (Local 25, 31,000 employees), CIGNA (265,000 employees), and the Cracker Barrel (16,823 employees).
Mike Evans, director of benefits for O.K. Industries, issued the following statement about the waiver:
“The Patient Protection and Affordable Care Act (PPACA), was signed into law by President Obama on March 23, 2010. For plan years beginning on or after September 23, 2010, the law requires, among other things, the immediate elimination of lifetime dollar limits on benefits and a graduated increase in annual benefit limits.
“We offer our employees a choice between two health insurance plans. One has lower annual and lifetime limits than the other and the premium paid by the employee is lower as well. Our employees choose which plan they wish to participate in.
“Under PPACA we would no longer be able to offer our employees the option of lower limits in exchange for lower premiums. As a result of national news coverage about companies who were faced with cancelling insurance for their employees or raising their premiums drastically the government developed a waiver program.
“The program requires plan sponsors to apply for the waver and to show that covered employees would be negatively impacted by a loss of coverage or significant increase in premiums if these plans were not allowed to continue. We believe continuing to offer both health plans provides a significant benefit to our employees and their family members so we chose to apply for a waiver for the plan with lower limits.
“O.K. Industries, Inc. received approval of our waiver on November 4. This approval will allow us to keep the plan in place for the 2011 plan year. We are required to reapply each year until 2014. As the law stands now, beginning in 2014 we will not be able to offer this plan to employees.”