Friday, April 28, 2017

Failing to Expand Medicaid Could Cost Ohio Employers $59M to $88M Per Year

According to a report released in March by Jackson Hewitt Tax Service, Ohio employers with 50 or more full-time equivalent employees could be on the hook for a total of $58.9 million to $88.4 million in annual penalties under the Affordable Care Act (ACA) for those employees who would have been eligible for health care coverage under the Medicaid expansion up to 138 percent of poverty. That is because those workers, if they are not covered under the company plan, would turn to the exchanges to get the required coverage and they would be eligible for a premium assistance tax credit.

Employees can also be eligible for the tax credit if the health coverage offered by their employer is not affordable -- that is the coverage costs more than 9.5 percent of the worker's wages or it did not provide "minimum value" as calculated on the U.S. Department of Health and Human Services website.

Even one employee accessing the premium tax credit to make the coverage possible and/or affordable then triggers the "employer shared responsibility payment."

Workers qualifying for Medicaid do not subject their employers to the "shared responsibility liability" payment or penalty.

According to the Jackson Hewitt report, The Supreme Court’s ACA Decision and Its Hidden Surprise for Employers  -- which can be found on the Hannah News home page under Document Collections (in the right-hand column)>Other>Library>March 21, 2013 -- the national total of "shared responsibility liabilities" directly attributable to individuals who would be eligible for a Medicaid expansion program in the states runs from $2.0 billion to $3.0 billion.

Jackson Hewitt estimated that Ohio has 70,441 uninsured adults under age 65 working full-time who fall between 100 to 150 percent of the federal poverty level. Of those, an estimated 29,487 would be eligible for the premium tax credit, giving rise to the estimated $58.9 million to $88.4 million cost.

As health care changes resulting from the ACA continue to be implemented, one of the first decisions to be made comes at the state level, with each state determining whether or not it will expand Medicaid for certain low-income adults. Yet, Jackson Hewitt commented that while implications for the individuals are being discussed, what the decisions mean for employers in states choosing not to expand -- and how significant the related costs to them could be -- is not being discussed, giving rise to the report.

Authored by the company’s first senior vice president for health policy, Brian Haile, the report explores how states that do not expand Medicaid leave employers (with 50 or more full time equivalent employees) exposed to the higher shared responsibility payments under the ACA.

Story originally published in The Hannah Report on April 18, 2013.  Copyright 2013 Hannah News Service, Inc.


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