- Days left

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

employers health care fee
Getty Images
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

Increase your money and finance knowledge from home

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

TurboTax Articles

Video: Tax Guidelines About Gifting

Note: Some of the content of this video applies only to taxes prepared prior to 2012. It is included here for reference only. Find out the tax guidelines about gifting with help from TurboTax in this video on tax tips.

Video: What are Income Tax Rates?

Note: The content of this video applies only to taxes prepared for 2010. It is included here for reference only. Income tax rates change depending on both the amount of money you make and how you made it. Find out about income tax rates with help from TurboTax in this video on tax tips.

Video: How To Reduce Errors on Your Tax Return

Did you know that errors on your tax return can affect the amount of your tax bill and the amount of time it takes to get a refund? Fortunately, TurboTax helps you avoid errors AND be sure you're getting all the tax deductions and credits you deserve.

Does Your Company Need to File Form 1095-B?

A company is responsible for filing IRS Form 1095-B only if two conditions apply: It offers health coverage to its employees, and it is "self-insured." This means that the company itself pays its employees' medical bills, rather than an insurance company. A company that doesn't meet both conditions won't have to deal with Form 1095-B. Its employees might still receive a 1095-B, but from their insurer, not the employer.

Video: Who Qualifies for an Affordable Care Act Exemption (Obamacare)?

The Affordable Care Act requires all Americans to have health insurance or pay a tax penalty. But, who qualifies for an Affordable Care Act exemption? Find out more about who qualifies for an exemption from the Affordable Care Act tax penalty, how to claim an exemption on your tax return and how the Affordable Care Act may affect your taxes with this video from TurboTax.

Add a Comment

*0 / 3000 Character Maximum


Filter by:

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

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

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

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

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

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

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

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

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

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

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

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

Affordable health care I guess is not so Affordable!!!!

March 15 2013 at 9:30 PM Report abuse +1 rate up rate down Reply