Tuesday, December 11, 2012

New Fee For ACA

Continuing our review of the impact of the  ACA healthcare law, it has recently been announced that there will be an additional tax placed on all policies beginning in January 2014.  Health & Human Services has released additional directives that include a $63 annual per person fee to help offset the cost to insurance companies for providing coverage to those who were previously considered uninsurable. 

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers.  Many employers already offering coverage to their workers don't see why they have to pay into a stabilization fund which mainly helps the individual insurance market. This tax puts the large companies on the hook for tens of millions of dollars and adds significant additional cost to mid-size and small employers.

Beyond the impact of the cost to agents on a personal basis, this fee may also push more employers to either not offer health coverage through their companies or to reduce the number of employees that are eligible for coverage by making them "part-time".

The fee will reduce each year and will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016.  It will phase out completely in 2017 — unless Congress decides to extend it.

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