Employers – Pay or Play, Affordable Health Care Act

See www.moranlong.com for additional information on health care and tax law integration.

What are employers likely to do, after the recent Department of Health and Human Services moratorium on enactment to Year 2015? Will they pay the penalty ($2,000 per employee not covered) and not have a tax deduction, or will they play and pay 2 to 3 times the penalty in health coverage for their employees?

Prior to the recent moratorium on enforcement, the benefits consultant Mercer Inc. conducted a survey and found that six percent of firms offering health coverage planned to cease coverage. In July, 2012, the Congressional Budget Office (“CBO”) estimated 2.5 percent of workers who are counting on their employer to offer coverage might lose the benefit by the end of the next decade. A Gallup poll found that 44.6 percent of Americans get their health insurance from an employer in 2011, a rate that has declined for more than a decade. The CBO projects, on balance, the law’s reforms will expand coverage to about half of the 58 million people who don’t have insurance today.

Currently, many employers are wise to hesitate at dropping health coverage as health coverage is a recruiting advantage for prospective employees, and a retention factor in the minds of current employees. 

Beginning in 2014, there is a tax of $63 per person covered (including all dependents under the employer plan, not just employees).  This tax is estimated to raise $25 billion fund to to cover people with high medical bills. The University of Notre Dame will pay more than $500,000 for the 5,000 employees and 7,000 dependents under its plan.   This new cost will be factored into tuition costs for future students.

 

Implement the ACA in a Careful, Thoughtful Manner-the U. S. Treasury Department

See www.moranlong.com for additional insights and planning suggestions for health care and retirement. 

By: Mark J. Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, issue date 7/2/2013

​Over the past several months, the Administration has been engaging in a dialogue with businesses - many of which already provide health coverage for their workers - about the new employer and insurer reporting requirements under the Affordable Care Act (ACA).  We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.  We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.  We have listened to your feedback.  And we are taking action.  

The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.  This is designed to meet two goals.  First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law.  Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.  Within the next week, we will publish formal guidance describing this transition.  Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law. 

Here is some additional detail.  The ACA includes information reporting (under section 6055) by insurers, self-insuring employers, and other parties that provide health coverage.  It also requires information reporting (under section 6056) by certain employers with respect to the health coverage offered to their full-time employees.  We expect to publish proposed rules implementing these provisions this summer, after a dialogue with stakeholders - including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements - in an effort to minimize the reporting, consistent with effective implementation of the law.  

Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015.  Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015. 

We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014.  Accordingly, we are extending this transition relief to the employer shared responsibility payments.  These payments will not apply for 2014.  Any employer shared responsibility payments will not apply until 2015. 

During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage.  Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).​

Colorado Health Care Exchange = Connect for Health Colorado CEO’s Update

Connect for Health Colorado CEO’s Update on Health Plan Prices and Competition http://www.connectforhealthco.com/news-events/news/

Patty Fontneau, Executive Director and Chief Executive Officer, Connect for Health Colorado (Colorado's Health Care Exchange created by Federal Law under the Patient Protection and Affordable Care Act).

I wanted to provide an update in response to questions we received about how much health plans will cost when our health insurance marketplace opens in October. The Division of Insurance posted information about preliminary filings and the Colorado Consumer Health Initiative conducted an analysis of those filings. We’re also analyzing the preliminary filings and are encouraged to see a broad range of costs. These monthly costs will be further lowered for many Coloradans by new financial assistance (tax credits) available only through Connect for Health Colorado.

Preliminary filings from health insurance carriers show that monthly premiums for a 21-year-old living in Denver from the majority of carriers will range from $146 to $234 for bronze plans and from $192 to $279 for silver plans, before cost-reductions based on income. Monthly premiums for a 40-year-old living in Denver from the majority of carriers will range from $186 to $299 for bronze plans and from $245 to $357 for silver plans. Bronze plans are the group of health plans for which the carrier will, on average, cover about 60 percent of health care costs and the consumer will pay for about 40 percent of costs. With silver plans the customer will pay less of the average overall health care costs (closer to 30%), but will pay more each month in premium. Connect for Health Colorado also expects to offer health plans at lower and higher costs and with other cost-sharing levels. The health plans are new and include a comprehensive set of benefits, including doctor visits, hospitalizations, maternity care, emergency room care and prescriptions.

We’re also seeing strong competition among carriers. Preliminary filings show that 10 carriers requested approval to provide about 150 health plans for individuals and families through Connect for Health Colorado. They include All Savers Insurance Company (part of UnitedHealthcare), Anthem Blue Cross and Blue Shield, Cigna, Colorado Choice, Colorado HealthOP, Denver Health, Humana, Kaiser Permanente, New Health Ventures and Rocky Mountain Health Plans. Six carriers – Anthem, Colorado Choice, Colorado HealthOP, Kaiser Permanente, Rocky Mountain Health Plans and See Change – requested approval to provide nearly 100 health plans to small employers through our marketplace.

What we’re seeing so far is good news for Colorado consumers. Starting in October, they will be able shop through Connect for Health Colorado and choose from many health insurance carriers at competitive rates. Nearly a half-million Coloradans will be eligible for further cost reductions to make health insurance more affordable.

Please keep in mind that all of this information is preliminary and may change based on review by the Colorado Division of Insurance. The Division of Insurance regulates insurance companies in the state and has started their standard review of the carrier filings. The review and final determination of plans and rates is expected to be completed in late July. Final details about premiums and the types and number of health plans will be known after that. We’ll continue to keep you updated.

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