While some businesses with more than 50 employees were relieved to have another year to comply with the Patient Protection and Affordable Care Act, the new deadline could have an unintended effect.
Credit Union Exchange Blueprint, a Birmingham, Ala.-based private exchange for credit unions and members that provides online access to insurance carriers, said it believes the decision to extend the compliance deadline for providing health insurance coverage to employees will cause more companies to drop their group coverage and send staffers to the individual market.
“Large employers will also hurt many of their employees by offering coverage, but they've been 'stuck between a rock and a hard place' since they faced severe penalties of $2,000 per full-time worker if they failed to provide coverage,” said EPL, the credit union core processing specialist in Birmingham, Ala., providing the technology behind CUEB.
“With that threat removed, large employers can now make their decision the same way small employers will – based on what's best for the employees,” EPL said.
Wayne Benson, CEO of EPL, said there is an opportunity here to educate.
“We know credit unions are looking for answers to help their employer groups and for their own staff insurance needs, too. The changes are important to understand and we can assist,” Benson offered.
Earlier this week, the White House announced that it would extend the deadline from 2014 to 2015 to allow employers with 50 or more employers to test the new reporting systems and make any necessary adaptations to their health benefits.
Prior to this announcement, small employers, which are not subject to the mandate, were already trying to decide whether to offer coverage next year or abandon it so that their employees could access the generous government subsidies through public and private exchanges, according to EPL.
With no employer mandate to force them to offer insurance, EPL said small employers are making their decision in part because of cost and in part because offering group health coverage could hurt workers and their family members by blocking them from the government tax credits.
“Employers offer benefits for a variety of reasons,” said Josh Hilgers, president of Health Partners America, which has developed private exchange technology to help individuals access the premium tax credits, “but the number one reason is to attract and retain quality employees.”
On Oct. 1, the federal government will open up marketplaces, commonly referred to as exchanges, to offer subsidies to the estimated 50 million uninsured Americans who can also start signing up for state-run health insurance programs.
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