For businesses across Michigan and the country, the Obama administration's one-year reprieve from financial penalties under the national health care law is nearing an end, forcing some employers to choose between buying coverage for employees or paying fines.
U.S. Judge Blocks Obamacare Rule for Non-Exchange States
An Oklahoma federal judge dealt a blow to President Barack Obama’s health-care law, invalidating IRS rules aimed at making policies affordable for consumers around the country.
Our summer has been filled with great headlines about the growth of private health exchanges. With the exception of one study that focused on agents, private exchanges are golden! Accenture estimates that three million are already enrolled in a private exchange, exceeding their earlier enrollment estimates, and they now predict that 40 million employees will be in private exchanges by 2018.
U.S. employers expect a 4% increase in 2015 health care costs for active employees after plan design changes, according to global professional services company Towers Watson (NYSE, NASDAQ: TW). If no adjustments are made, employers project a 5.2% growth rate, putting absolute cost per person for health care benefits at an all-time high.
Regardless of your political leanings, there’s a disturbing trend lately that doesn’t bode well for health care costs for all of us as individuals, or for employers working hard every day to make ends meet. Some call Speaker Boehner’s recent move to sue the Obama administration as a political stunt. Is it? Might he actually win? Could be a long while before we know but it’s important to look at the underlying costs of these decisions.
The Affordable Care Act (ACA) requires most individuals to obtain acceptable health insurance coverage for themselves and their family members or pay a penalty. This rule, which took effect in 2014, is often referred to as the individual mandate. The penalty amount that an individual will have to pay is capped at the annual national average bronze plan premium.
Keeping Private Exchanges Competitive
Rarely is there talk of the upside to the Affordable Care Act, but there really are many positive aspects to the law. Well, maybe not the law itself, but what the law has done to push forward the inevitable – defined contribution plans, and private health exchanges for the delivery of benefits to employees. With each new study, and employer survey, we see that more and more employers are embracing the defined contribution model and looking to private exchanges to deliver benefits.
Here’s what we’re learning:
The Internal Revenue Service has issued final regulations on the tax credit available to certain small employers that offer health insurance coverage to their employees under the Affordable Care Act.
Just when you thought it was safe to go back in the water – the IRS bites. Its recent ruling on dumping employees into the public health exchanges has many employers scratching their heads and asking “hmmm, isn’t the point of the Patient Protection and Affordable Care Act to get more people health care coverage?” Why then would the IRS impose hefty penalties on employers who provide a subsidy for employees to go out and seek health care in the public marketplaces?
The ACA and private exchanges could change the game when it comes to employer-sponsored health coverage. Sharon Goodman, principal at Slevin & Hart, and the International Foundation for Employee Benefit Plans provide eight areas employers need to look at when considering a private exchange.