9.5% ACA Max Cost = Boon To Entitlement Crowd?


By Molly Mulebriar

I recently presented a renewal to a client. The audience was the owner and his secretarial staff. When I mentioned that under the ACA, one of the requirements to maintain an “approved” plan was the prohibition of charging plan participants more than 9.5% of their gross income for individual coverage.

I took that a step further by offering a plausible solution to mitigate the employer’s financial angst.

“Why don’t you reduce everyone’s pay by 9.5% and put the “savings” into your self-funded claim account. Every employee would essentially get a pay reduction but gain “free” insurance. If my calculations are correct these monies will fund most of your fixed costs and claim exposure.”

Immediately one staff member exclaimed “That’s great. I’ve been thinking about this for some time now and have done the homework! I’m all for this because with a reduced income I will qualify for $63 more in electric bill subsidies, more food stamps and additional child payments.”

The entitlement crowd knows their numbers.