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Health care reform

Health insurance coverage and fees under the Affordable Care Act

Insurance plans must meet several requirements related to affordability and quality under the ACA. These changes include:

Several ACA changes related to employee coverage eligibility took effect in 2016. Additionally, insurers are subject to a number of taxes and fees that support the ACA’s provisions and penalize employers who fail to adhere to them.

Taxes and fees

The ACA and other laws introduced a number of taxes and fees for employers, such as:

  • Health Insurance Claims Assessment Act tax: This tax on paid health insurance claims supports Michigan’s Medicaid program. It applies to fully-insured and self-funded plans.
  • Health insurance premium tax: This is an excise tax assessed on all fully-insured health plans. The fee is based on an industry-wide revenue assessment of overall premium growth. The Consolidated Appropriations Act of 2016 suspended this tax for one year. It doesn’t apply in 2017.
  • Patient-Centered Outcomes Research Institute fee: This fee, which will end in 2019, funds research on comparative clinical effectiveness and health outcomes for patients. It assesses a fee based on the per capita increase in national health expenditures. HAP includes this fee in our rates for all large group plans as well as all small group qualified health plans.
  • Risk adjustment fee: This fee supports administrative costs for a program that subsidizes plans with more members, which are more likely to have higher claim costs and greater risk. We include this fee in our rates for all small group qualified health plans.

Be aware of the high-value plan tax, also called the Cadillac tax. This tax will take effect on plans beginning in 2020, but concerns over its effect could delay the starting date. It would levy a 40 percent excise tax on health plans exceeding a set dollar amount in coverage: $10,200 for individuals and $27,500 for families. The Cadillac tax would apply to fully-insured and self-insured plans.

Tax penalties for insufficient coverage

Employers with more than 50 full-time employees will face a tax penalty if they fail to offer their employees’ health insurance. Find out your clients’ responsibilities under the ACA.

Learn whether your client must offer coverage.

We break down Affordable Care Act requirements so you don't have to

Learn more about the ACA

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