Employers slam fee in new health law

By Janet Adamy

The Wall Street Journal

Employers are bracing for a little-noticed fee in the federal health-care law that will charge them $63 for each person they insure next year, one of the clearest cost increases companies face when the law takes full effect.

health insuranceCompanies and other plan providers will together pay $25 billion over three years to create a fund for insurance companies to offset the cost of covering people with high medical bills.

The fees will hit most large U.S. employers, and several have been lobbying to change the program, contending the levy is unfair because it subsidizes individually purchased plans that won’t cover their workers. Boeing Co. BA -0.15% and a union health plan covering retirees of General Motors, GM +0.32% Ford Motor Co. F +0.22% and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.

Insurance companies, which helped put the fee in the law, say the fee is essential to prevent rates from skyrocketing when insurers get an influx of unhealthy customers next year. The fee is part of a new insurance landscape created by the health law that will forbid insurers from denying coverage to people with pre-existing conditions.

The $63 fee will apply to plans covering millions of Americans in 2014. It applies to employers that assume the risk for workers’ medical bills, and many private plans sold by insurers. The fee will be smaller for 2015 and 2016, though regulators haven’t set those amounts.

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If you’d like to discuss employment or health care law, contact David Weissman, director of the Rose Law Group Employment Law and Managed Health Care Law Practice, dweissman@roselawgroup.com

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