A provision buried inside Obamacare will force many employers to pay an extra $63 per employee next year. Analysts say most of the cost will likely be passed on to workers.
“It’s caught most employers, if not all employers, by surprise,” said National Business Group on Health Vice President of Public Policy Steve Wojcik. “They’re very upset about it.”
Over the next three years, the Obamacare fee will fund a $25 billion account for insurance companies designed to cover higher costs associated with insuring people with pre-existing conditions. The government claims the fee will go down in 2015 and 2016.
The Obama Administration says the fee “is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all.”
But the United Auto Workers Retiree Medical Trust, which covers 806,000 autoworkers, has joined others in asking federal regulators for an exemption. Boeing, which has 405,000 employees and dependents subject to the fee, has also requested an exemption. Boeing says the Obamacare fee will add $25 million in costs on top of the already $2.5 billion the company spends each year on health benefits.
Health and Human Services (HHS) denied the request by Boeing and others but said the $63 levy would not affect the thousands of retired autoworkers whose primary coverage is Medicare. Still, says HHS, it will not categorically exempt employees in court-structured benefit plans.
“At a time when we are facing economic uncertainty,” said Chantel Sheaks of Buck Consultants, a subsidiary of Xerox, “[companies will] be hit with a multimillion-dollar assessment without getting anything back for it.”