Employers Caught Off Guard by 'Unfair' Health-Care Fee

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Employers are bracing for big fees next year for insuring their employees. The fee, equal to $63 for each worker, is a little-noticed requirement of the Patient Protection and Affordable Care Act that became law in 2010. The fee goes to create a $25 billion fund for insurance companies to offset the cost of covering patients with high medical bills.

As The Wall Street Journal reports, the fee will hit most large employers, and they're fighting back. The requirement unfair, they say, because it subsidizes individually purchased plans that won't cover their workers. Companies including Boeing Co. (BA) and a union health plan covering retirees of General Motors (GM) Ford Motor Co. (F) and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.

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The fee goes into effect next year and applies to medical plans covering millions of Americans. It applies to employers who self insure as well as private plans sold by insurers. As the Journal notes, the fee will be smaller in 2015 and 2016, but amounts for those years have yet to be determined.

Few noticed the fee when the act passed three years ago. Employers have spent recent months trying to peel it back, the Journal reports, but final regulations published Monday in the Federal Register left it largely intact.

You can read more about the controversy and learn what insurers are saying in the full story (subscription required).

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