Healthcare
The Issue
The passage of the Affordable Care Act (ACA) in 2010 changed healthcare coverage for the 180 million Americans who participate in employer-provided plans and profoundly impacted how most businesses administer those plans. What was once a fairly straightforward process, easily handled by insurance brokers and third-party administrators (TPAs), became too complicated for most small businesses to manage on their own. The role of brokers and TPAs grew in time and cost, often pulling in the client's accountant as well.
Two ACA provisions drove much of that cost: the Health Insurance Tax (HIT), which taxed large insurance providers and got passed through as higher premiums, and an excise tax on premium plans (the Cadillac Tax). Both were repealed at the end of 2019 (see Our Position below), but the administrative burden they created outlasted them. The ACA's change in the full-time employee definition from 40 hours a week to 30, with formulas to calculate full-time equivalents, and the ongoing IRS reporting requirements on employee coverage, remain a significant and growing cost for businesses administering health plans today.
Our Position
A large majority of member businesses provide healthcare as a necessary benefit and work continuously with their brokers and providers to keep doing so. That benefit only remains viable as long as employers can afford to provide coverage without jeopardizing their own financial stability. The Auto Care Association lobbied against the HIT and the Cadillac Tax as part of a coalition of employer associations and businesses, succeeding in getting both repealed at the end of 2019. As a founding member of the Partnership for Employer-Sponsored Coverage, the Association continues to lobby for a return to the 40-hour-a-week definition of a full-time employee and for simplified, reduced reporting requirements.
How This Impacts You
The administrative cost of compliance lands directly on your bottom line. The ACA's affordability threshold for employer-sponsored coverage rose to 9.96% of an employee's wages for 2026, the highest it's been since the requirement took effect, meaning employers have less room to shift costs to employees before triggering a penalty. Combined with ongoing IRS reporting obligations, this is money and staff time that could otherwise go toward your business. The Association's continued push to simplify these requirements and restore the 40-hour full-time threshold is aimed directly at reducing that burden.
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