There’s no such thing as a free lunch — or a Free Choice Voucher under the Affordable Care Act (ACA).
A new law (H.R. 1473) recently signed by President Obama eliminates vouchers.
Many critics suggested the voucher program would’ve provided an incentive for the youngest and healthiest employees to opt out of employer coverage — which, in turn, would increase costs for the remaining workers.
Previously, the ACA would’ve required employers who sponsor health plans to offer certain employees a voucher if:
- their health coverage was considered “unaffordable,” and
- they qualified for subsidized health insurance through an Exchange.
Health coverage is “unaffordable” if the employee’s cost exceeds 8% of his or her family’s income, and the family income isn’t more than 400% of the federal poverty level.
The voucher amount, which the employer would pay directly to the Exchange, would equal the most generous amount the employer would’ve paid for employee coverage under its plan.
Reporting requirements removed
The elimination of vouchers means less reporting (previously scheduled to begin in 2014) for many employers. Specifically:
- The reporting of health coverage required as part of the ACA (IRC Sec. 6056) now only applies to large employers that are subject to the Shared Responsibility Assessment, and
- Employers are no longer required to report “(t)he option for which the employer pays the largest portion of the cost and the percentage of cost paid by the employer in each enrollment category under such option.” This info would’ve been used to determine the amount of the now-eliminated Free Choice Voucher.
