March 13, 2017 –
Employers are still the biggest sponsors of healthcare insurance in America.
Private companies paid 68 percent of their employees’ premiums while state and local governments paid 71 percent of the health-coverage costs in 2016, according to the Bureau of Labor statistics.
But there is seemingly conflicting data. On average, employers paid 83 percent of health insurance premiums for single coverage and 72 percent of family coverage in 2015, according to Zane Benefits.
However, it’s likely that both sets of data are correct.
As year passes, ObamaCare has been increasingly devastating to employers and to the national debt, state government budgets, and to individual policyholders who haven’t qualified for free Medicaid. And health-insurers such as Aetna have pulled out of ObamaCare.
Whatever the true figures regarding employers, it’s an expensive perk for each employee at a minimum annual cost of $5,000.
So what about the bill, American Health Care Act (AHCA)? What will happen to employers if it’s passed to replace ObamaCare?
If passed, it turns out AHCA will benefit employers in five ways:
1. Elimination of tax penalties
ObamaCare requires companies with 50 or more workers to pay for health insurance.
If they don’t, there are expensive tax penalties.
Worse, ObamaCare defines a full-time employee as a person who only works 30 hours per week.
That mandate greatly increased the costs to employers by extending coverage to part-time workers.
It also served as a catalyst to hurt productivity because it led to a cut in employee hours.
That’s why the average American workweek is only 34.4 hours.
AHCA doesn’t necessarily repeal the requirement to pay for health coverage, but the tax penalty will disappear retroactively to 2016.
2. Postponement of the Cadillac tax
AHCA will delay the Cadillac tax — a 40 percent tax on both employers and insurers on high-cost coverage – until 2025.
Unions and employers, alike, have been very critical of the ObamaCare Cadillac tax. Employers’ criticisms of ObamaCare are very well documented.
You might also recall in 2013 when the United Union of Roofers, Waterproofers and Allied Workers was the first union to demand a “repeal or complete reform” of ObamaCare.
3. Increase in tax saving tools
Starting in the tax year of 2018, AHCA changes the tax code. That will mean an increase in individual savings accounts (HSAs) and health-flexible spending accounts (FSAs).
AHCA will permit tax-free contributions to the individual and families. HSA allowances will double.
It will also increase how HSA dollars can be spent by repealing the ban in HSAs for over-the-counter medicine.
The ObamaCare limit of $2,600 will be eliminated on nontaxable contributions to FSAs.
Companies will experience a savings in the Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) contributions.
AHCA will allow high-deductible options that will drive savings in costs.
4. Ban taxes on medical devices and health-insurance companies
There will be savings on employer-sponsored healthcare costs.
The new law eliminates the ObamaCare’s 2.3 percent taxes on new medical devices and health insurance.
They were postponed for 2017 but were scheduled to be implemented in 2018.
5. Simplification of reporting
The repeal of tax penalties are a welcome change. As a result, it’s anticipated that the complex mandates will be greatly simplified, especially in reporting paperwork – specifically Section 6055 and 6056, respectively.
Why? We got insights from President Trump’s first executive action, which was to tell agencies to alleviate the monumental paperwork requirements.
From the Coach’s Corner, while we’re still waiting for AHCA’s likely passage, we can probably anticipate positive changes.
Here are additional articles on public policy:
How Bad Policy and Journalists Hinder Economic Prosperity — The nation’s economy will strongly improve if we capitalize on lessons in common-sense economic-growth policies from two late presidents.
What Bill Gates Says about Donald Trump Will Surprise You — Mr. Gates astutely observes Mr. Trump was not elected “for specific policies” but for his “kind of leadership.” The tech icon also believes Mr. Trump has a message reminiscent of President John F. Kennedy.
Economy: The High Public Price Tag of Manufacturing Jobs — Donald Trump’s election has prompted a surge in optimism for the economy and stock market, according to authoritative polls. But countless manufacturing workers and their families are on public assistance says a UC Berkeley study. The answers aren’t more entitlements or higher minimum wage. Here are the real solutions.
Analysis: Trump’s Vision to Fix Trade Deficit, Create Jobs — Donald Trump acts positively: Americans are tired of the reign of politically correct terror, the movement for income redistribution, and the massive loss of good-paying jobs.
Governments – from Cities to Federal – Dangerously in Debt — The U.S. economy has been slowly mending. However, the situation is bleak for governments at all levels.
Why? High debt is dangerous and economic growth is dreadfully slow. This is best illustrated by the enclosed U.S. Debt Clock.
“Government’s first duty is to protect the people, not run their lives.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.