by Christopher Freeburn | March 15, 2013 10:33 am
As President Barack Obama’s health care law begins to take effect next year, businesses will face a new charge that received little attention during the political debate over the measure.
Starting in 2014, employers will have pay a $63 fee for each employee, spouse, dependent child and retiree covered under their health insurance policies. Over three years, the fees are expected to amount to $25 billion and will establish a fund to help insurers pay for previously uninsured people with expensive medical conditions, the Wall Street Journal noted.
Insurance companies contend that extending coverage to currently uninsured people will ultimately reduce overall insurance costs. At present, the cost of medical care for uninsured patients is indirectly paid for through higher insurance premiums.
While the $63 fee is expected to decrease in years after 2014, the government hasn’t said by how much.
A number of the nation’s biggest employers — including Ford (NYSE:F), General Motors (NYSE:GM) and Boeing (NYSE:BA) — are asking for exemptions for the fees, arguing that they help pay for insurance coverage for non-employees. However, so far, the government has proven unwilling to let them avoid or delay the fees.
Most companies are expected to ultimately pass at least part of the new fee on to their employees by raising employee insurance contributions.
The opinions contained in this column are solely those of the writer.
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