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Employers hope to dump ACA's excise tax, employer mandate

Employers hope to dump ACA's excise tax, employer mandate

Repealing the Affordable Care Act's 40% excise tax on high-cost health care plans and the employer mandate are at the top of employers' “wish list” for changes they would like Congress to make to the health care reform law, according to a new survey.

Eighty-five percent of 644 employers surveyed by Mercer L.L.C. want the excise tax, which goes into effect in 2020, repealed, while 70% back repeal of the employer mandate. Under the mandate, employers in 2016 are liable for a $2,160 per employee penalty if they do not offer coverage to at least 95% of their full-time employees — those working an average of at least 30 hours per week.

In addition, the employer penalty for offering coverage in which the share of the premium the employee pays for single coverage exceeds 9.5% of household is $3,240 for each affected employee.

Employers are staunchly opposed to the mandate “not because they don't want to offer coverage. It's because proving that they offer coverage is so much work,” Tracy Watts, Mercer health reform leader in Washington said in a statement Wednesday. Among other things, employers have to file detailed coverage reports.

While the overwhelming majority of respondents opposed the ACA employer mandates, few thought they would trigger the mandate's financial penalties, according to the survey.

Virtually none of the surveyed employers thought they will trigger the ACA coverage mandate penalty, while just 8% thought they might be at risk for the ACA health care plan premium affordability penalty.

“This suggests that the penalties are not going to be a huge source of revenue” for the federal government, Beth Umland, Mercer's research director for health and benefits in New York, said in a statement.

Last year, the Congressional Budget Office estimated that repeal of the employer health care coverage and affordability mandates would cost the government $9 billion in lost tax revenues.

The survey also found that the ACA's employer coverage mandate has had little impact on group health plan enrollment.

For example, 74% of respondents said the mandate had no impact on plan enrollment, while 17% said enrollment increased between 1% and 4.9%, and 5% said enrollment increased by at least 5%.

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