Large employers recently received some good news from the federal government concerning two issues that posed administrative challenges under several provisions of the Patient Protection and Affordability Act (PPACA). The U.S. Department of Health and Human Services and the U.S. Department of Labor and Internal Revenue Service all issued similar responses to frequently asked questions (FAQs) regarding automatic enrollment, employer shared responsibility, and waiting periods that clarify employer obligations to employees, that provide temporary relief to employers who must comply with a barrage of new health care rules.
In an effort to provide consumers with competitive insurance options as mandated by the Patient Protection and Affordable Care Act (PPACA), the federal government has awarded a $93.7 million, multi-year contract to CGI Federal, Inc. to establish a federal health insurance exchange. The Centers for Medicaid & Medicaid Services (CMS) Center for Consumer Information & Insurance Oversight (CCIIO) has hired CGI Federal, Inc., a U.S. subsidiary of CGI Group, Inc., to build the federally-sponsored health insurance marketplace that will “provide millions of Americans with ‘one-stop shopping’ for affordable coverage,” according to the CCIIO website. The CGI Group, Inc.
New Research Indicates Most Employers Will Continue to Sponsor Health Benefits for Employees Despite PPACA Mandates
Four recent surveys confirm the notion that the majority of employers will continue to offer employer-sponsored health benefits in 2012 and beyond. The national surveys, conducted by Mercer, Towers Watson Health Care, GfK and Kaiser Family Foundation/Health Research & Educational Trust, yielded fairly consistent results that indicate employers overall continue to view their health benefits plans as a key component of the employee benefit offerings. The survey feedback also confirms that few employers plan to terminate their health benefit plans when state health insurance exchanges, mandated by the Patient Protection and Affordable Care Act (PPACA), become operational in the fall of 2013.
In a recent post, we discussed how challenging it can be for consumers to grasp the many changes to health insurance under the Patient Protection and Affordable Care Act (PPACA). Employers also face many of the same challenges, but with the added mandate to comply with new federal and state requirements as an outgrowth of health care reform initiatives being implemented in a struggling U.S. economy.
Some of the key questions public policymakers are asking include:
In a statement on June 16, the Obama Administration announced the end to a program that gives waivers to some employers and unions who provide lower levels of health insurance coverage for their employees. This program was instituted as a result of new annual coverage minimums that are in effect today pursuant to the Patient Protection and Affordable Care Act (PPACA).
New Study Predicts Significant Changes to Employer-Sponsored Health Insurance Due to PPACA: Earlier Studies Forecast Less of an Impact
A recent study published in The Online Business Journal by McKinsey Quarterly reveals that many employers knowledgeable about the nuances of health reform are likely to change, restructure or drop benefits for employees as a result of health reform legislation.  This stands in stark contrast to research lauded by proponents of health reform, who insisted reform would not lead to a large shift in employer health insurance practices.
As healthcare debates continue to lurk in the halls of Congress and elsewhere, a piece of good news has surfaced – companies issuing fewer than 250 W-2 forms won’t have to report them to the IRS through the end of calendar year 2012. The most recent IRS interim guidance also declares that other employers who had failed to meet previous reporting requirements will not be penalized.
As background, a provision of the Patient Protection and Affordable Care Act (PPACA) requires employers to include the cost of employer-sponsored healthcare coverage on employees’ W-2 forms for all tax years starting on or after January 1, 2011. BenefitMall issued a detailed legislative alert on this issue last fall.
It remains to be seen what effect legislation will have upon employer groups, and just how much costs will be driven up. To make up for the costs, some employers are now looking at voluntary benefits as a way to offer an employee benefit at no cost to the employer.
Several studies have come out backing this notion up. A Mercer study showed that a quarter of employers responding feel that complying with the Patient Protection and Affordable Care Act will add at least 3% to next year’s costs. Employers are now looking at voluntary benefits as an option.
A recent article in Fortune Magazine backs what we’ve been saying all along. The new health care reform law is just not sustainable.
The new law is dependent upon expanding and sustaining the current employer-based system that insures many Americans through their jobs. According to documents released, companies such as AT&T, Verizon, Deere and Caterpillar are exploring their options when it comes to health insurance coverage, including dumping health care coverage and instead, paying the penalty fee to the government.