The two officials in charge of implementing the most important parts of the Affordable Care Act appeared on Capitol Hill today for a hearing in front of the House Ways and Means Committee. Republicans called it “oversight” while one Democrat referred to it as an “inquisition.” The House is clearly partisan but there was important information covered. Congress will be taking five weeks off to go back to their constituents and leaving only 12 real legislative days before open enrollment begins. Will they be in for another round of “town hell” meetings like in 2009?
We are within 60 days of when the exchanges open and if you read the regulations you will find a concept called the “stabilization period” employers need to follow after measuring employers to see if they have to offer coverage. It works out to be 60 days in most cases when they have to offer coverage to full-time employees after measuring them.
Remember 30 is the new 40 and those average working over 30 hours a week or 130 per month have to be offered coverage in 2015. Employers with variable employers like service and hospitality industries are to measure employees. The feds are encouraging employers to “voluntarily report” in 2014.
Will the exchanges be ready to go and how rocky will the transition be? We will be providing guidance to employers on measurement strategies in future articles. It is obviously complicated and employers are holding off on hiring until this plays out and the Administration is trying to stabilize growing public skepticism about the laws economic impact.
Commentary on Ways and Means Hearing
One of the biggest fears that I had for the law was with what would happen if someone signed up for a subsidy because they were told to by a celebrity only to find out that they should not have qualified or do not qualify because of either qualifying for a parents plan or employer plan.
According to the law there is a recovery method for over-payments called a clawback. This means if a person got too much in credits for insurance they will be required to pay it back in 2016 when this thing is running. There is no reporting this first year so this will likely happen to thousands of people because of a lack of reporting requirements.
Another issue policy wonks have identified as a challenge is the fact that if an employee is offered an acceptable plan then they will not qualify for a subsidy. The IRS is “working through that issue” according to the official at the hearing. This is a big unknown that needs clarification because it impacts an employers decision of whether to pay or play in 2015.
Finally, be aware of the other potential fraud and abuse. The tax credits are available to citizens and “lawfully present” individuals including those on student visas. More information will need to come out but expect more to be on the program than originally anticipated.
Official Employer Report
The IRS will be requiring an “official employe report” that will due for tax season 2016. This will be designed by his agency to verify whether the business offered coverage and whether or not their employees are eligible for premium tax credits. The IRS contends they are working with employers to make the reporting transition as smooth as possible. Today a new federal business website was released showing some of the things businesses need to know. For assistance contact E.D. Bellis to keep yourself ahead of this.
A Private Alternative Online?
A big win for the private exchange marketplace. The concept of a health insurance exchange is not a new phenomenon. In fact, companies like E-HealthInsurance.com and others have been around but they have not had the opportunity to sell on the new government exchanges. CNBC’s Dan Managan reports, for profit exchanges like this company and others are viable alternatives and could enroll up to 1 million of the uninsured if given the opportunity.
Until this week, government exchanges being run by the federal government, individual states, or federal-state partnerships had not given ehealthinsurance.com and other for-profit Web markets the green light to enroll uninsured individuals under the Affordable Care Act’s subsidized coverage scheme.