Health Care Reform: The Financial Impact in 2013 and Beyond

As the third year of the Patient Protection and Affordable Care Act (PPACA) approaches, employers need to be aware of additional fees that will be assessed on insurers and plan administrators of employer self-insured plans beginning in 2013. In addition, reporting health care costs to the government begins.

The new fees will increase the cost of providing a group health plan for employees. They include:

  • Fees to fund research on patient-centered outcomes — These amounts are assessed with respect to plan or policy years ending after September 30, 2012. Plan sponsors must choose a method for calculating the average number of covered individuals.
  • Transitional reinsurance fees — The transitional reinsurance program will require health insurers and plan administrators to make contributions for the three-year period beginning January 1, 2014.
  • Pay or play penalties — Beginning in 2014, employers with 50 or more full-time equivalent employees become subject to employer penalties if they fail to comply with the PPACA. In some cases, the total cost of these penalties may be less than the total cost of providing coverage. CliftonLarsonAllen’s Health Insurance and Penalty Calculator provides information about the impact of reform on individual companies.
  • Cadillac tax — Starting in 2018, insurers of employer-sponsored plans or companies that self-insure their own plans will be subject to an excise tax in certain circumstances. Plan sponsors should have already verified that they have the systems in place to determine and report the aggregate cost of applicable employer-sponsored coverage on employees’ Forms W-2.

Many health care reform provisions will impact the cost to provide health care coverage for employees. Employers should be aware of the additional fees and reporting requirements and work with their benefits consultants to determine the financial impact of health care on their businesses.

CliftonLarsonAllen LLP (CLA) is the fourth-largest auditor of employee benefit plans in the U.S. and audits more than 2,000 plans. CLA professionals can help your readers understand the complex issues associated with reform. Please contact me for interviews and content tailored to your needs.

Ann Dee Allen, PR Manager CliftonLarsonAllen LLP

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