On Thursday, a Health and Human Services Executive joked that anyone who refers to the newly named State Marketplace as “an Exchange” as we now know them, needs to put a quarter in the jar. A new revenue source for HHS? Perhaps. The comment and loose change penalty would be cute if it didn’t come on the heels of several recent announcements and clarifications of additional fees and taxes being layered on employers to help pay for Obamacare. Please keep in mind these are the employers who already bear the financial burden of providing healthcare to their employees.
Recently, HHS clarified the Obamacare requirement for current health plans to pay a “fee” assessment of $63 for every employee and dependent covered under their medical program. This Transitional Reinsurance Program Tax is designed to help cover new high risks coming in to the state Exchanges (oops… Marketplace +$.25). If the Massachusetts model, where we saw adverse risk explode the costs in our state Exchange (darn, Marketplaces +$.25) is any indication of how state Exchan… Marketplaces will operate across the country, this $25 billion tax won’t even begin to cover the cost. Wait until the states read the fine print of the HHS notice, and discover that they are allowed to load an additional amount on the $63 fee, if they determine their state needs it. If I were a betting man…
Locally, WGA was just notified by BCBS that they will be assessing all clients an additional 1% on HMOs and 2% on PPOs and yes 2% on dental plans for the Health Insurance Industry Fee, not to be confused with the Transitional Reinsurance Program Tax above or the Comparative Effectiveness Research Fee which will load another .5% on plans January 1 2014. We also were notified that BCBS will handle the Transitional Reinsurance Tax by adding 1% on all plans, fully insured and self funded, so forget the $63 calculation, keeping up?
For those in Massachusetts, keep in mind that starting in 2007, companies’ plans were hit with between 4% and 7% in excess plan charges to fund the early days of Romneycare. The compounding effect on that alone is disheartening to consider.
This is only the beginning, and many states will have the excess cost burden of bringing their plan designs up to code under Obamacare. I’m going to Trademark the terms “Healthcare Fiscal Cliff”, and “Obamageddon”. I’m sending my $.50 penalty in to HHS now, but I need to buy a new stamp, I heard the price went up.
About the Author
Christopher Nadeau is a Principal at WGA and Leader of the Employee Benefits Group. He counsels on the development and design of employee benefits programs to match the corporate philosophy, long-term needs and objectives of WGA clients. He is also an industry leader on Health Care Reform and the cost impact and administrative burden on employers.