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Self-funding An Effective Hedge Against ACA Taxes

05/01/14

  02:25:20 pm, by MedBen5   , 280 words,  
Categories: News, Health Plan Management, Health Care Reform

Self-funding An Effective Hedge Against ACA Taxes

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When employers consider making the switch from traditional health insurance to self-funded coverage, MedBen emphasizes the regulatory freedom self-funding offers. And we’re not just talking about less red tape here… there’s a inherent financial savings as well, for employer and plan member alike.

On the American Action Forum, health economist Robert Book recently number-crunched seven new taxes imposed under the Affordable Act, and estimated how they will affect policyholders. While the taxes in question are levied directly on businesses, the additional costs incurred by the “taxee” – be it insurer, pharmaceutical company, or employer – will ultimately trickle down to the covered individual.

Based on his analysis, Book predicts that in 2014:

  • Premiums for exchange plan coverage will be $354 higher per covered individual;
  • Fully insured group health plan premiums will be $196 higher, and
  • Self-funded group health plan premiums will be $94 higher.

The added premiums will increase in 2015… except for self-funded plans, which will only be $74 higher. And in 2016, the extra premiums for self-funded plans drop further still, to $59.

So why is that? Because two of the biggest taxes – the Health Insurance Annual Fee and the Health Exchange User Fee – don’t apply to self-funded plans.

Nor do self-funding’s advantages end with reduced tax responsibility. Other provisions of the ACA, such as a modified community rating and a greater number of required benefits, don’t apply to employers that self-fund their health care plan. And with MedBen as your benefits manager, we can use these regulatory advantages to help your business create a self-funded solution that saves you money.

For additional information about the advantages of self-funding with MedBen, contact Vice President of Sales & Marketing Brian Fargus at bfargus@medben.com.

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