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Employers Caught Off Guard by 'Unfair' Health-Care Fee

by David Schepp Mar 15th 2013 12:08PM
Updated Mar 17th 2013 7:48AM
employers health care fee
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Employers are bracing for big fees next year for insuring their employees. The fee, equal to $63 for each worker, is a little-noticed requirement of the Patient Protection and Affordable Care Act that became law in 2010. The fee goes to create a $25 billion fund for insurance companies to offset the cost of covering patients with high medical bills.

As The Wall Street Journal reports, the fee will hit most large employers, and they're fighting back. The requirement unfair, they say, because it subsidizes individually purchased plans that won't cover their workers. Companies including Boeing Co. (BA) and a union health plan covering retirees of General Motors (GM) Ford Motor Co. (F) and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.


The fee goes into effect next year and applies to medical plans covering millions of Americans. It applies to employers who self insure as well as private plans sold by insurers. As the Journal notes, the fee will be smaller in 2015 and 2016, but amounts for those years have yet to be determined.

Few noticed the fee when the act passed three years ago. Employers have spent recent months trying to peel it back, the Journal reports, but final regulations published Monday in the Federal Register left it largely intact.

You can read more about the controversy and learn what insurers are saying in the full story (subscription required).

Obama Speaks Out On Affordable Care Act At State Of The Union

Around The Web

Surprise: New insurance fee in health overhaul law

Free or Low-Cost Care | HealthCare.gov

New health-care fee draws fire - MarketWatch

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franzr00

Yes companies will complain, but they were silent while pocketing the other subsidies from the ACA. And they will simply pass along the $63 to employees, but subsidize that cost for the executives.

$63? That hardly covers the cost of the breakfast that the CEO gets while meeting with his colleagues in the morning, to talk about golf, etc., and one business item to allow the breakfast to be a tax deductible business cost.

Of the fees collected, $20 billion will go toward paying high medical claims. HHS says the remaining $5 billion will be used to retroactively offset an earlier program that reimbursed employers insuring early retirees through 2011. Under that program, Boeing received $50 million and the UAW trust received $387 million, according to a federal summary of the payouts.

If the average health insurance cost per employee for a business runs about $10,000, another $63 isn't a big factor, and if ACA bends the cost curve down, gotten back quickly.

March 18 2013 at 9:44 AM Report abuse rate up rate down Reply
braelzb

any politician that thinks a law should be pushed through without being fully understood needs to be retired at the earliest vote. hope enough people can remember that far back. Americans would have long ago, I doubt they still have the "right stuff" now.

March 18 2013 at 2:12 AM Report abuse rate up rate down Reply
thirdherdnerd

Put a law in place which will be such an abysmal failure that the people will demand total government control of all health care. Voilà, socialized medicine! That has been the end game all along and you fell for it hook, line and sinker. Dumb as a box of rocks.

March 17 2013 at 5:24 PM Report abuse rate up rate down Reply
RSW

Gee I guess someone should have read this thing before passing it !
please get rid of that dim whit Pelosi !

March 17 2013 at 12:24 PM Report abuse +2 rate up rate down Reply
idahoblue777

Just another sad attempt to bring fear to the people. The baggers' worst fear is that ObamaCARE will actually be liked once it is implemented is a reality now. Their plan to create a slave class with no access to livable wages, affordable health care, affordable higher education, and workers' rights is slowly slipping from their grasp. Their plan to bankrupt this country and eliminate the Middle Class is just a lost dream now. Sorry baggers, America is not buying what you're trying to foist on them.

March 17 2013 at 9:03 AM Report abuse -5 rate up rate down Reply
1 reply to idahoblue777's comment
RSW

Employers will just stop offering health ins. It will be cheaper to just pay the fine.Good going Dems !

March 17 2013 at 12:25 PM Report abuse rate up rate down Reply
raidrmik67

This is what happens when you pass a bill without even reading it. The Lib's were in such a hurry to pass this thing they decided they would pass it then work out the details later.

March 17 2013 at 6:12 AM Report abuse +1 rate up rate down Reply
goatcars

I own a small biz ( 47 employees ) and learned early on what Obamacare would mean to me. If I go to 50 employees, all the expenses kick in, and I would probably be out of business, or at least a profitable one!!!
It is beyond me how ANY small biz owner could possibly support this plan or this President.

March 16 2013 at 4:30 PM Report abuse +2 rate up rate down Reply
rreef1993

Obama Care has been and is a sad joke on the people and the medical system. Your health insurance will double and if you are a senior on medicare good luck your co-pays will double and rates to the government will at least double. Remember the law is you have to have health insurance not that the insurance companies have to sell you health insurance at reasonable cost...

March 16 2013 at 10:07 AM Report abuse +1 rate up rate down Reply
1 reply to rreef1993's comment
supersonic

Except it's no joke, it's real.

March 16 2013 at 5:46 PM Report abuse rate up rate down Reply
yorkiemum

It's the insurance company lobbyists that write these bills and submit them to congress. If you need to blame anyone, blame your senators and representatives for not reading them before passing them. It isn't like they're doing anything else. It's their job. Make them do it.

If you haven't filed an insurance claim, of any kind, in a while, you're probably going to be in for a nasty surprise. I had a home invasion that caused considerable damage to my home and USAA refused to pay because they said it was vandalism.. To add insult to injury, this month they informed me that I am "over insured" and reduced my coverage. And, of course, there was no reduction in premium.

March 16 2013 at 6:08 AM Report abuse -2 rate up rate down Reply
1 reply to yorkiemum's comment
maryweinstein

You mean homeowner's insurance doesn't cover break-ins and vandalism? Hard to believe, I thought that was one of the reasons for getting homeowner's insurance!

I know insurance companies are in the business of making money and satisfying their stockholders now, not in the business of making their policyholders whole again after a loss, although you'd think so from they way they (falsely) advertise..

I hope you wlll fight your insurance company about that claim, get an attorney if necessary. And if you're in a state where you still have the choice of homeowner's insurance carriers, I hope you will switch to a different one.

March 16 2013 at 7:43 PM Report abuse +2 rate up rate down Reply
sgrimes889

They are going to have to pay the fee in addition to the health insurance they provide. What a bunch of baloney. This Administration is small business or any business unfriendly. My question is, when he runs everyone out of business, when he has taxed the wealthy to death and there isn't anyone elses money to confiscate, who is going to provide the "stash" for those who suck from the public teat?

March 15 2013 at 10:02 PM Report abuse rate up rate down Reply