The Affordable Care Act is changing the health care landscape in many ways. Many health care providers are caught in the midst of corporate changes and mergers in an attempt to keep profit margins high. But why is this, and how could it impact consumers? An LA times article has the details.
There have been many successes as a result of Health Care Reform, including a reduction in the uninsured rate, highly utilized subsidies, and the establishment of state and federal health insurance exchanges. These and more benefits are outlined in the following article by Business Insurance.
With the launch of public and private exchanges under the Affordable Care Act, individuals seeking healthcare now have additional options. However, employers are still deeming it important to offer insurance coverage. According to recent data from the Urban Institute, 83% of workers between the ages of 18 and 64 have the option to be covered under insurance by their employer, and 87% of these individuals chose to take advantage of that option.
A recent Business Insurance article has more on these numbers.
Colorado is one of 17 states, including the District of Columbia, that has a state exchange marketplace. In lieu of using the federal exchange, these states have been funding and operating their own. Recently, Colorado has levied a new fee in order to help fund this state exchange. However, this fee would apply to all policies, not just those purchased on the exchange. An article from Health Insurance Exchange (HIX) discusses the CO Marketplace.
Question and Answer: Using Contributions to Purchase Coverage
Question: Can an employee use a contribution through either a cafeteria plan or HRA to purchase unsubsidized individual health insurance coverage on a public exchange?
Just focusing on the rules regarding eligible expenses, an HRA can reimburse premiums for coverage obtained through an exchange. This is true regardless whether the cost of the coverage is subsidized. Of course, if the participant does receive a subsidy, only the portion of the premium actually incurred by the participant (i.e., the portion not covered by the subsidy) can be reimbursed.
The rule is different for cafeteria plans. Such premiums cannot be paid on a pre-tax basis through a cafeteria plan. Section 125 has been amended to specifically provide that coverage issued through an exchange is not a qualified benefit that may be offered through a cafeteria plan unless the employer is providing group coverage through the exchange (i.e., through the SHOP program). The rule under Section 125 applies regardless of whether the individual receives a subsidy.
-Insight courtesy of Scott Wold, Attorney, Hitesman & Wold P.A.
Question:I am a full-time permanent employee. My employer has asked me to return to a Temp Agency and lose all of my permanent employee benefits. He has told me if I do not voluntarily comply, I will be fired. He is doing this to help himself comply with the “under 50 permanent employee” rule.
Is this legal? If I do refuse to return to the Temp Agency and am fired, would I be allowed to file for unemployment benefits?
Answer: This is a valid question that many employees may be facing in the upcoming year. However, this is more of a legal question for an employment attorney. Currently there is nothing in the Affordable Care Act that addresses whether or not employers will or could face legal action for terminating employees or making them work full-time for a temp agency to avoid having to offer them insurance. There will be additional guidance on the Affordable Care Act over the next year. Whether or not this will be addressed in the guidance though is unclear.
A response to a question from a concerned employee.
Question: Why is an employer of several employees opting to hire only part time people now with the health care reform bill–why aren’t the penalties for doing this more severe?
Response: Some employers are indeed responding to the health reform bill by changing their workforce structure which may include changing their workforce to include more part time employees. This is a strategy, in part, to avoid the pay or play shared responsibility penalties which is levied on full time employees (working greater than 30 hours per week) who receive a subsidy on the exchange. In cases where an employer doesn’t offer health insurance, the penalty is based on all full time employees if one full time employee receives a subsidy on the exchange.
As health reform becomes more clear, employers are going to formulate these changes into their strategic planning. On the one hand they will look to long term financial viability or how these changes impact financial performance. On the other hand employers will want to understand how potential decisions will affect key qualitative priorities such as employee morale, satisfaction, corporate image, etc.
One thing is for certain, it is becoming increasingly difficult for employers to be able to afford year over year increases in their health insurance premiums.