The Affordable Care Act: Repair and Reform
High Employee Treshold or ACA Requirements
Te ACA does not penalize small businesses with less than 50 employees or ailingto oer their employees health care coverage. Tis exempts almost all constructionindustry employers rom the ACA employer mandate. By not requiring constructionemployers to oer health care coverage to their employees, the ACA begins a race tothe bottom with respect to benets. Employers contributing to multiemployer healthplans will be orced to choose whether to provide health care benets or their em-ployees or remain competitive.Tis high employee threshold will have a devastating eect on the entire constructionindustry. Approximately 93% o employers in the industry have ewer than 20 employ-ees.
In electrical construction specically, almost 70% o employers have 20 or eweremployees.
Tus, these small businesses will be placed at a competitive disadvantagecausing multiemployer health plans to dissolve and employees to be responsible orpurchasing their own coverage through the exchanges.Although the exact type o health care coverage that will be available throughthe exchanges is unknown, it is likely that it will not be comparable to that availablethrough multiemployer health plans.
In addition the premiums o the exchange planswill vary or individuals based on income, age, amily size, and other actors.
Tismeans that two employees working in the same job with identical responsibilities couldpay dierent amounts or health care coverage through an exchange.
Calculating andtracking these cost variances would make it very dicult or an employer to providehealth care coverage through an exchange.
Te Reinsurance Fee
Beginning in 2014 and continuing until 2016, either the Department o Health andHuman Services or individual states will assess a ee or everyone enrolled in a planoutside o the exchanges.
Health insurance carriers will pay the ees on behal o em-ployers who sponsor ully insured plans.
Presumably, the carrier will pass this costand any additional ee on to the employer or employee through increased premiums.For sel-insured plans, which includes the majority o multiemployer health plans, theplan administrator will be responsible or paying the assessment.
In multiemployer plans, trustees set the benets, corresponding contributions,premiums, and employee co-pays. Just like ully insured plans, sel-insured plans willrecoup the expense o the reinsurance ee by increasing the employee and employercontribution amounts. Tis means collective bargaining agreements between IBEWlocal unions and their contractors will need to be renegotiated. Tis creates anopportunity or the multiemployer health plan structure to change, shifing moreindividuals into the exchanges and leaving ewer dollars to und ACA provisions. Asindividuals leave multiemployer plans, there will be ewer people to shoulder thereinsurance ees—resulting in higher per-person costs and orcing even more indi- viduals into the exchanges.
Defning Qualifed Health Plans
As currently structured, the ACA does not include multiemployer health plans inthe denition o a qualied health plan. As a result, employees do not qualiy or thesubsidy to oset the cost o health care coverage and employers do not qualiy or thetax credit or contributions to sel-insured multiemployer plans.
In order to x thisproblem, the implementing regulations should deem all multiemployer health plansas qualied health plans. Doing so would alleviate two major problems with the ACA.First, assuming IBEW members meet all other qualications, the ACA individualsubsidy to oset the cost o health care coverage would be available to them. Second,dening multiemployer health plans as qualied health plans would allow otherwise
“And that means that nomatter how we reormhealth care, we will keepthis promise: I you like your doctor, you will beable to keep your doctor.Period. I you like your health care plan, you will be able to keep your healthcare plan. Period. Noone will take it away. Nomatter what. My view isthat health care reormshould be guided by asimple principle: fx what’sbroken and build onwhat works.”
—President Obama, July 16, 2009