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Business Guidance

Expanded Badgercare is ending. Is your company prepared for the unexpected financial impact?

By Thom Mangan, Hugh Devlyn

3 minute read time

2023 kicked off with record-high group health insurance renewals; now, employers face a mid-year fiscal tsunami when employees covered on Badgercare join their group health plan.

What you need to know

  • During the Pandemic, Wisconsin expanded access to its Badgercare program. The federal funding that made the expansion possible will be phased out starting April 1. As it does, those losing coverage will experience a qualifying event.
  • As per Badgercare eligibility contracts, workers on Badgercare may join company medical plans. That could add $10,000 in premium cost for every enrollee.
  • Employers must assess cost risk, communicate with employees, and stay current on relevant regulations. This enrollment change could occur as early as April 1.

What is Badgercare and what changed during the Pandemic? Badgercare is Wisconsin's Medicaid program, providing healthcare coverage for low-income individuals and families. During the early days of the pandemic, the state took steps to expand the program using additional federal funding. Examples of expanded coverage, include:

  • Children could remain on Badgercare until the age of 26 instead of the usual 19.
  • People already enrolled in Badgercare could remain on the program for a longer period.
  • Wisconsin waived the usual three-month waiting period for new enrollees and simplified the renewal process.

Furthermore, during the pandemic, Congress banned states from stripping people of Medicaid coverage. This ban allowed Wisconsin to keep people on Badgercare even if their income or circumstances changed during the pandemic.

How will the end of this federal funding impact employers?

The additional federal funding for the states is coming to an end, which could significantly impact Wisconsin employers. Many employers have employees who have waived group coverage to take advantage of the expanded Badgercare program. Now that this funding is ending, many Badgercare participants will look to their employer-sponsored plans to continue coverage. This change could mean an increase in premiums of up to $10,000 in employer costs for every person that joins the company medical plan.

What should employers do now?

Employers should do a cost/risk analysis with data from their most recent open enrollment to determine how many of their employees that waived coverage are covered by Badgercare.

  • Complete your assessment now, as this enrollment change could occur as early as April 1.
  • Determine the unexpected financial impact on your group health plan based on the percentage of those employees enrolling in your most affordable option.
  • Communicate to employees about the changes to their healthcare coverage and any options they may have.
  • Stay current on the latest news and regulations regarding this change to ensure you comply with any new rules and provide the best coverage possible to employees.

Contact your Johnson Financial Group Employee Benefits Consultant or find one to discuss how this unexpected change could impact your company’s group health plan.

ABOUT THE AUTHORS

Thom Mangan

Thom Mangan

VP Employee Benefits Consultant | Johnson Financial Group

As Vice President, Employee Benefits Consultant, Thom is a recognized leader in the insurance, fintech, healthcare, and employee benefits industry. He works with clients to develop benefits strategies specific to their company's short and long-term goals.

Hugh Devlyn

Hugh Devlyn

VP Employee Benefits Sales Manager | Johnson Financial Group

As Vice President, Employee Benefits Sales Manager, Hugh is a strategic, innovative and creative problem solver who is passionate about helping senior finance and human resources professionals challenge the status quo and drive meaningful change. 

Products and Services offered by Johnson Bank, Member FDIC, a Johnson Financial Group Company. Johnson Financial Group and its advisors do not provide legal or tax advice.