What’s on employers’ health care reform wish lists?
With six years of the Affordable Care Act (ACA) and the first year of the employer mandate behind you, now is the time for employers to assess where they are with ACA compliance. To find out how the ACA is impacting organizations and how they’re responding, we asked 644 employers, small and large, what changes they would like to see made to the ACA. Repealing the Excise Tax was first, followed by repealing the employer mandate.
1. Repealing the Excise Tax: 85% in favor
2. Repealing the employer mandate: 70% in favor
3. Changing the definition of a full-time employee to 40 hours per week: 66%
4. Repeal and replace the ACA: 54%
Under play or pay, employers have had to modify their plans, track worker hours, manage eligibility and report coverage to prove they are doing something they have been doing all along.
The deadline for reporting to the IRS about coverage in 2015 was extended from March to June, and at this point most employers have a handle on their results. Virtually none of the survey respondents believe they will be liable for the “a” assessment – meaning they all offered coverage to substantially all employees working 30 or more hours per week. And just 8% thought they might be at risk for the “b” assessment – meaning that some of their employees might qualify - and obtain - subsidized coverage on the exchange because their employer’s plan did not offer affordable contributions or meet minimum plan value requirements.
“This suggests that penalties are not going to amount to a huge source of revenue,” said Beth Umland, Mercer’s research director for health and benefits. The CBO had estimated that employer penalties would raise $9 billion in revenue in 2016.
If “pay or play” isn’t hitting most employers as hard as they’d feared, what’s the major pain point associated with the ACA? The impact most employers noted (84%) was increased administrative burden.
Tracy Watts, Mercer’s leader for health reform, explains: “More than half of Americans already get their health insurance from their employer, and three out of four workers are satisfied with their health benefits. Under play or pay, employers have had to modify their plans, track worker hours, manage eligibility and report coverage to prove they are doing something they have been doing all along.”
We anticipate that the Congressional battle over the ACA will intensify as the Excise Tax looms larger, GOP lawmakers urge the repeal of the act and Democrats push for changes.
For insights on the latest developments in health care reform and our commentary on front-page headlines, visit the U.S. Health Care Reform blog.