As if health insurance premiums weren’t rising quickly enough already, ObamaCare — sold as a way to reduce healthcare costs — is going to make them jump another $63 per person per year beginning in 2014.
As part of a 102-page regulation issued by the Department of Health and Human Services, the federal government is imposing a fee of $5.25 per month on every health plan participant.
According to HR Benefits Alert, “The money from the fee will be pooled in an account managed by the HHS. It will be used to reimburse insurance companies who end up covering a large share of individuals with pre-existing conditions. Those insurers will be eligible for reimbursement of a percentage of those individuals’ claims that exceed a specified amount.” Insurers will be prohibited from refusing coverage to individuals with preexisting conditions beginning January 1, 2014.
Both individual and employer-sponsored health plans, covering an estimated 190 million Americans in all, will be hit with the fee. The Associated Press reports that “the charge … works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.”
Employee benefits lawyer Chantel Sheaks, a principal at Xerox subsidiary Buck Consultants, told the AP that the new fee is a “sleeper issue.”
“Especially at a time when we are facing economic uncertainty, [companies will] be hit with a multimillion-dollar assessment without getting anything back for it,” Sheaks said.
The fee is allegedly temporary, lasting just three years and getting smaller each year, from $63 in 2014 to about $42 in 2015 to roughly $26 in 2016. “It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend the fees,” the AP observes.
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