Last summer, NLBMDA-member dealers who participated in a public policy survey rated health care as the top issue affecting their businesses. The biggest challenge for many employers trying to provide health care coverage to their employees continues to be compliance with the Affordable Care Act (ACA).
Both single and family premiums increased 4% from the previous year, according to the Kaiser Family Foundation’s 2015 Employer Health Benefits Survey. The average annual premiums for employer-sponsored health insurance were $6,251 for single coverage, of which workers on average paid $1,071. The average family premium was $17,545 for family coverage, with workers on average contributing $4,955.
Although there are incentives under ACA for employers that offer health care coverage for their employees, a common complaint has been the compliance burden associated with the rule. For small businesses that choose to—but are not required to—provide health care coverage to their employees, the disincentives remain cost and increased paperwork requirements.
Last year, there were two legislative victories for employers regarding ACA implementation. The first victory centered on requirements for employers with 51 to 100 employees offering coverage. The other victory, which should help small businesses, suspended additional fees on fully-insured health care plans.
On October 8, 2015, President Obama signed the Protecting Affordable Coverage for Employers Act, which automatically places businesses with 51 to 100 workers into the large employer category, while still allowing states to treat them as small employers if they choose. At issue is a provision in ACA that expands the definition of a “small employer” to include companies with 51 to 100 employees, subjecting them to burdensome new requirements starting January 1. The action by Congress should prevent major premium increases for many small and midsize businesses.
A second health care victory occurred on December 18, 2015, when the health insurance tax (HIT) on fully-insured health care plans was suspended for 2017 as part of a year-end omnibus bill—a term used in Washington to refer to legislation that consolidates a diverse array of items into one piece of legislation.
The HIT is levied annually on fully-insured health care plans that are offered by many small and medium-size businesses. In 2015 and 2016, the federal government is expected to collect $22.6 billion from the HIT. Although the suspension of the tax will not fix all the problems with the Affordable Care Act, it is a positive development in helping control health care costs.
According to data from the U.S. Department of Health and Human Services, 82% of large companies (500 or more employees) offer a self-insured health care plan. However, only 26% of mid-size companies (101 to 499 employees) offer a self-insured health care plan and it is a mere 13% for small companies (less than 100 employees).
Legislation has been introduced in both the House of Representatives and the Senate permanently repealing the HIT. The Jobs and Premium Protection Act (H.R. 928, S.183) is supported by a majority of the House and NLBMDA, as part of the Stop the Hit Coalition (www.stopthehit.com) continues to work toward full repeal.
Defining the Full-Time Employee
NLBMDA also supports legislation (H.R. 30, S. 30) that would define a full-time worker under ACA as one who works 40 hours a week, rather than the law’s current definition of a full-time employee working only 30 hours a week. At the beginning of 2015, in one of its first acts of the new Congress, the House passed the bill by a vote of 252 to 172. The vote was largely along Party lines with 12 Democrats joining Republicans in support of the legislation.
There is strong support in the Senate as well for the legislation, which has 41 cosponsors, including two Democrats. Nevertheless, the Obama Administration has threatened to veto the bill if it is also approved by the Senate.
The federal government’s reliance on employer reports to enforce ACA compliance leaves little flexibility for employers. Although the goal of expanding health care coverage is laudable, the ACA’s complexity has been frustrating for many employers who want to provide health care coverage to their employees. NLBMDA will continue its work in Washington, D.C. on behalf of dealers to streamline ACA reporting requirements and ensure employer-sponsored health care coverage remains affordable.