The passage of the Affordable Care Act (ACA) in 2010 changed healthcare coverage for the 180M Americans who participate in employer-provided plans and profoundly impacted the administration of these healthcare plans for most businesses. What was once a fairly straightforward process that was easily handled by insurance brokers and third-party administrators (TPA) became too complicated for most small businesses to administer, and the role of the brokers and TPAs increased in time and cost to their clients, frequently having to also enlist their accountants to provide new services.
Some of the provisions of the ACA that have already increased healthcare premiums (or would have) are the Health Insurance Tax (HIT) that taxes the large insurance providers (which is passed through by increased premiums) and an excise tax on premium plans (Cadillac Tax). On the administrative side, the change in the definition of full-time employees from 40 hours a week to 30 hours, with formulas to determine full-time equivalents, and the ACA reporting requirements to the IRS regarding your employee coverage, quickly became overly burdensome and necessitated those increased costs to administering employee health plans.
Additionally, in 2020, several states introduced legislation for a state Health Insurance Tax. They have not yet passed in any of legislatures.
A large majority of member businesses provide healthcare as a necessary benefit, and are continuously working with their brokers and providers to continue to do so. This benefit remains viable as long as employers can afford to provide coverage without jeopardizing their own financial well-being. The association has lobbied against the HIT and the Cadillac Tax with a coalition of employer associations and businesses that succeeded in having both repealed at the end of 2019. The Auto Care Association, as a founding member the Partnership for Employer-Sponsored Coverage, continues to lobby for a return to the 40-hours a week definition of a full-time employee, and simplified, reduced reporting requirements.
How This Impacts You
The proper loan or grant made through a local bank may assist you in your ability to keep employees on your payroll and your business operating through the pandemic. The terms and conditions for these programs have been updated multiple times and so we encourage you to regularly consult the Auto Care Association website to learn about any program revisions.