We have talked before about how the MLR rules were supposed to squeeze carriers into making health insurance premiums more affordable but instead, have done just the opposite.
I an wonder how many wasted hours employers have spent trying to calculate rebate checks and allocate them to current and former employees.
As 2014 approaches now they have to figure out what is affordable.
Of course the goobers in DC have their own set of rules and guidelines. Ignore the fact that almost none of them have ever worked in private business much less had to figure out how to make payroll. Reminds me of Jethro Bodine who, every week, wanted to be something different when he grew up. One week it was an airline pilot. The next a brain surgeon.
Of course Uncle Jed didn't discourage him and told Jethro he could be almost anything he wanted.
So back to that affordable issue . . .
The folks at Cigna were kind enough to keep brokers in the loop, at least for now, and sent out this memo on "the mandate" and an IRS definition of . . . affordable.
CignaCoverage is considered “affordable” if employee contributions for single coverage do not exceed 9.5% of the employee’s wages. The regulations provide three safe harbors that employers can use to determine if employee coverage is affordable:
- 9.5% of an employee’s W-2 wages for the year
- 9.5% of an employee’s monthly wages determined by multiplying the employee’s hourly rate by 130 hours per month
- 9.5% of the Federal Poverty Level for a single individual
At least employers have some guidelines.
Or do they?
A few months earlier the folks at Forbes had this to say about affordability.