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Benefits lobbying group targets health care law's excise tax, work week rule

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Benefits lobbying group targets health care law's excise tax, work week rule

Five years after President Obama signed his signature health reform care law, it is time for legislators to consider changes to the law, the head of an employer benefits lobbying group says.

“Like most five-year-olds, the (Patient Protection and Affordable Care Act) still needs direction,” James Klein, president of the Washington-based American Benefits Council said Tuesday in a statement.

“Congress should fix what isn't working and help make the law more administrable. We urge Congress to preserve employer-sponsored plans through much-needed legislative changes to PPACA,” Mr. Klein added.

Some of the changes the benefits council would like to see lawmakers make is repeal or modification of the law's excise tax. The 40% excise tax will, starting in 2018, be imposed on group health car premiums exceeding $10,200 for single coverage and $27,500 for family coverage. Third-party claims administrators will pay the excise tax for self-funded employers. Insurers will pay the tax for fully insured employers. TPAs and insurers are expected to seek reimbursement from employers.

“The Council is particularly concerned about the implications of the 40% excise tax on high-cost coverage. 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,” Mr. Klein said.

Absent repeal of the excise tax, the benefits council, in an earlier report, recommended that only the cost of major medical coverage be included for excise tax trigger and calculation purposes.

In addition, the council recommends greater flexibility to determine if an employee works full-time — defined by the health care law as those working an average of at least 30 hours a week.

“Modifications are needed to minimize administrative burdens and compliance risk related to determining whether a worker is a full-time employee, particularly with respect to employees working a variable schedule,” the benefits council said in its report, which it issued last year.

That 30-hour standard is important because employers face a penalty — $2,000 per employee — if they do not offer coverage to at least 70% of full-time employees this year and to 95% in 2016 and succeeding years.

In addition, the benefits council recommends repeal of a health care reform law provision — not effective until regulators issue rules — that will require employers to automatically enroll those employees that do not choose coverage offered by their employers.

“Mandatory auto-enrollment is not required in an environment where virtually all people must have health coverage, and it is an inefficient use of resources to reach a comparatively small portion of the population,” the benefits council said.

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