The Affordable Care Act has increased the burden for benefit professionals and forced employers to alter their business practices to comply with the health care reform law, industry experts told Congress yesterday.
In two separate House subcommittee hearings, employer and industry representatives testified about the effectiveness of the employer and individual mandates and real world experiences since the ACAs enactment five years ago.
Employers, they said, have been forced to drop or alter benefit offerings, hire benefit brokers to keep them abreast of the changing laws and for many, spend an increased amount of time administering their companys employee benefit plans.
The ACA has made benefits much more complicated than they ever were before, said Sally Roberts, director of human resources at Morris Communications Company, who testified on behalf of the Society for Human Resources Management to the U.S. House Education & the Workforce Subcommittee on Health, Employment, Labor and Pensions.
Roberts told representatives she personally spends twice as much time administering health care benefits for her employer than before the ACA was enacted.
The reporting required is costly, complex and confusing, said Scott Womack, president of Womack Restaurants. In a separate hearing about the individual and employer mandates, he told the House Ways and Means Health Subcommittee, All employers have had to either create or buy new software as we have, or contract with a service to do so.
He added, It is unclear whether the federal government can actually use the data in its systems.
Our reality today under the ACA is very different than what was promised, he testified. Over the last four years, our insurance premiums have risen 60%. Our single coverage now costs $6,400 annually and family coverage costs $19,200 annually. However, we have also had to double our deductibles to $2,500 and raise the out-of-pocket limit by two thirds.
Still, Sabrina Corlette, senior research fellow at the Georgetown University Health Policy Institute Center on Health Insurance Reforms, says on average, premiums are decreasing under the ACA.
In New York alone, she told the House Ways and Means Health Subcommittee, Once the ACAs individual responsibility requirement was put into effect, premium rates dropped by an average of 50%.
In spite of dire predictions that the law would cause premium growth to explode, in fact weve seen the opposite, she testified. Since the ACA was passed, we have seen the slowest growth in health care prices in 50 years. And the three slowest years of growth in real per capita national health expenditures on record were 2011, 2012, and 2013. In employer-based coverage, the average annual family premium was approximately $1800 lower in 2014 than it would have been if premium growth since 2010 had matched the 2000-2010 average rate of growth.
Cadillac tax
Congress should fix what isnt working and help make the law more administrable, says James Klein, president of the American Benefits Council. Like most five-year olds, [the ACA] still needs direction.
The Council, he says, is particularly concerned about the implications of the 40% excise tax on high-cost coverage. Dubbed the Cadillac tax, it is scheduled to take effect in 2018, but has already compelled employers to reluctantly consider the type of changes to health plans that do not serve either the employer or their workers, Klein says.
On behalf of SHRM, Roberts testified that employers are taking action, including changing coverage plans, to avoid the tax.
SHRM supports H.R. 879, Ax the Tax on Middle Class Americans' Health Plans Act, which would repeal the 40% excise tax on high-value employer-sponsored health care benefits.
The American Benefits Council also supports repealing the tax, but says absent that, modifications could include more realistic indexing of the thresholds, only applying the cost of major medical coverage in determining whether thresholds are exceeded and establishing a safe harbor that excludes any plan below a certain actuarial level.
Many Democrat House members said the hearings would result in little or no change to the ACA.
This hearing is not about the mandates. Its about scoring political points, said Jim McDermott (D-Wash.), the ranking member of the House Ways and Means Health Subcommittee. Its about continuing a tired baseless attack that will generate no new ideas.
