Large employers will be responsible for additional fees beyond the health care coverage requirement
It has been well-publicized that certain businesses are required to provide affordable health care coverage for their employees under Obamacare. And while this is the most financially significant requirement, there are a few other payment requirements of which business owners should be aware.
First, the ACA created a new non-governmental agency known as the Patient Centered Outcomes Research Institute (PCORI), the goal of which is to:
assist patients, clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence concerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed through research and evidence synthesis that considers variations in patient subpopulations . . .
42 U.S.C. § 1320e(c). As may be clear from this description, the specific goal of the PCORI remains somewhat undefined. What is known, however, is the source of funding for the agency. The ACA, in amending the Social Security Act, imposes a fee on all health insurance policies and self-insured plans in conjunction with the number of lives covered by the policy or self-insured plan. The fee is $1 per covered life in 2013, $2 per covered life in 2014, and unknown for years thereafter. Though the employer is obligated on this fee only for self-insured plans (the insurer pays it otherwise), business owners can reasonably expect that insurers will pass this cost on.
Second, and more significantly, employers will be required to pay a Transition Reinsurance Fee (TRF), the goal of which is to insure the government against losses resulting from other provisions of the ACA. (Like the PCORI fee, the Health and Human Services Regulations giving rise to the TRF, distinguish between self-insured plans and those provided through health insurers, but as with the PCORI fee, business owners can expect to bear the costs of the fee, either directly or indirectly.) The TRF is expected to be about $63 per insured life during 2014, its first year of applicability. It is expected (though not yet known) that the fee will decrease per year thereafter.
Beyond the requirements that large employers provide affordable coverage to its workers, employers will also be liable on several other fees, like those discussed above. If your business is a large employer, or is growing in that direction, Obamacare presents several challenges. If you have questions or concerns about the challenges facing your small business, contact the attorneys at Lohse & Kreuter for a free consultation today.
For previous posts in this series, please see: