Now that the Supreme Court has taken clear action to uphold the critical safety net that Exchange tax credits provide for millions of American families, Congress must now take bipartisan action to make much-needed, and long-awaited, structural changes to the Affordable Care Act (ACA). Since enactment of the ACA, RILA has urged members on both sides of the aisle to come together on legislative measures to provide regulatory relief for job creators and our employees. Now is the time for Congress to act on these important issues.
For over four years, RILA has worked with Congress and federal agencies to ensure that retailers can continue to provide quality, affordable health coverage that is customized to meet the specific needs of their employees. Specifically, RILA has worked to raise awareness of challenges, compliance issues and ambiguities that impede employers' ability to comply with the expansive law.
Establish a More Efficient Reporting Structure for Employers
The ACA requires employers to compile monthly and report annually, at tax filing time, numerous data points to the IRS and their own employees. This data is used to verify the individual and employer mandates under the law, and administer premium tax credits for coverage in Exchanges. Currently, there is no system to access this important information during the Exchange enrollment process.
RILA supports H.R. 2712, the Commonsense Reporting and Verification Act of 2015, which creates a voluntary prospective reporting system to improve the accuracy of Exchange tax credit eligibility determinations. Under the system data that would have been reported at the end of the year could now be reported at the beginning of the eligibility process, helping to mitigate issues with inaccurate tax credit determinations. The legislation also authorizes electronic transmission of reporting data and protects privacy by not requiring businesses and insurers to collect and report Social Security numbers for spouses and dependents.
Restore the 40-hour work-week standard
Retailers have traditionally used an hourly or salaried workforce designation, not full-time or part-time, which reflected an employees' desire for flexible hours and a manager's need to staff up a store during busy times. The ACA's definition of full-time as 30 hours of service per week fundamentally limits the flexibility of staffing from both the employee and store manager standpoint.
Raising the full-time definition in the ACA back to the common standard among the business community will make it easier for businesses to provide more hours to all employees; thereby increasing employees' take home pay. This change will also provide retailers with the opportunity to offer more generous health coverage to full-time employees without making premiums prohibitive and help ensure other employees still have access to affordable coverage options.
RILA supports legislation in both the U.S. House of Representatives and U.S. Senate to restore the 40 hour full time standard. The Save American Workers Act, HR 30, passed in the House earlier this year, and the Forty Hours is Full Time Act, S. 30 remains under consideration in the Senate.
Eliminate the transitional reinsurance fee on businesses
The ACA requires employer-sponsored plans, health insurers and multiemployer (union) plans to cover the cost of a transitional reinsurance program. The transitional reinsurance program fee funds the cost of health plans in the insurance Exchanges that cover high risk individuals. For 2014, the federal fee was $63 per enrollee (covered life) for the year. For 2015, the federal fee is $44 per enrollee, and for 2016, the fee will be $27 per enrollee.
For large retailers that provide coverage to thousands of employees and their families, the transitional reinsurance fee will cost millions of dollars over the three-year period. This is a cost on top of those already incurred by complying with the numerous other employer requirements under the ACA.
RILA supports H.R. 1886, a bipartisan bill introduced by Representatives Pat Tiberi (R-OH) and Dan Lipinski (D-IL), which reverts funding for the program the general revenue of the U.S. Treasury and requires a Government Accountability Office (GAO) audit of the fees collected in 2014.
Strengthen and improve access to employer wellness programs and consumer directed health products
Retailers have a vested interest in encouraging healthy lifestyles among their workforces and support efforts to establish and expand wellness programs. Retailers:
- Provide quality and affordable health care to their employees and families, and are leaders in benefits design by customizing plans to meet their workforces' specific needs.
- Encourage their employees to participate in voluntary wellness programs, and appreciate that a foundation of healthy habits can last a lifetime.
- Embrace the idea that investing in a healthy workforce today not only lays the foundation for a healthier society but also ensures the development of a more productive workforce which is able to enjoy a higher quality of life.
- Offer employees robust wellness benefits that include programs such as: weight loss; smoking cessation; incentives to see a primary care physician; diabetes control; nutritional/healthy eating; store discounts on healthy foods; gym discounts; group counseling sessions; and store gift card incentives for enrolling and participating in wellness programs.
Burdensome and complicated federal regulations, and the interpretation of the laws and legal threats by the EEOC, are a fundamental reason why some employers are reluctant to establish or expand wellness programs, and take full advantage of the premium and cost sharing discounts or rebates permissible under federal law.
RILA believes it is critical that the requirements of multiple federal laws all be interpreted in a consistent manner. Federal regulations, and the interpretation and enforcement of the laws, should not stifle employers' ability to continue to be innovative and forward-thinking in plan design and implementation.
RILA also supports legislation introduced in both chambers of Congress, H.R. 1189 and S. 620, which aim to reaffirm current law allowing employers to tie a financial reward or surcharge to a wellness program, and to clarify that an employer is not in conflict with the ADA solely on the basis of the financial ties.
Remove the duplicative automatic enrollment requirement
The ACA requires employers of 200 or more full-time employees to automatically enroll an employee in a health plan if coverage is not voluntarily chosen by an employee.
As a result, an employee who is automatically enrolled in coverage may already be eligible for and enrolled in coverage from his or her spouse's plan, a parent's plan, Medicare, Medicaid, or an insurance Exchange/Marketplace plan. Also, individuals may be auto enrolled in a plan that does not fit their specific health needs or is not accepted by their health providers.
Due to the nature of the retail industry, employees may not work a consistent number of hours from pay period to pay period. For those automatically enrolled, deducting premiums from an employee's paycheck during a pay period in which the employee did not work a significant number of hours may cause financial hardship. In certain cases, an employee could end up with a negative paycheck if their earnings are based on commissions or tips.
Further, automatic enrollment implementation can be very administratively complex and burdensome to retailers due to the high turnover rate in their workforces. RILA supports legislation to repeal the duplicative automatic enrollment provision.
Rescind the problematic 40 percent excise tax on health plans
Under the ACA, and beginning with taxable years after December 31, 2017, a monthly 40 percent excise tax will be imposed on employer-sponsored health coverage that exceeds a statutory dollar threshold.
Retailers fully embrace the concept that investing in a healthy workforce today not only lays the foundation for a healthier society but also ensures the development of a more productive workforce. The 40 percent excise tax runs counter to these goals, by stifling employers' ability to create innovative plan designs and undermining their ability to incorporate such things as consumer directed health products and on-site clinics into their coverage structures.
RILA Supports legislation introduced in the U.S. House of Representatives to repeal the 40 percent excise tax. H.R. 879, Ax the Tax on Middle Class Americans' Health Plans Act, introduced by Rep. Frank Guinta (R-NH) and H.R. 2050, The Middle Class Health Benefits Tax Repeal Act, introduced by Rep. Joe Courtney (D-CT).
Sandra L. Kennedy