Employers Rejoice! Redirecting Anger Has Never Been Easier
“What kind of plan is this! It’s terrible!” screams an employee during a group benefits meeting. “Yes, we hate it!” chimes in the rest of the employees.
CFO responds: (HR cringes in back of room)
“I agree, I hate it too! But the reality? This is a government built health plan mandated by the Affordable Care Act (ACA). There are things the plan must do and there are things the plan can’t do. My advice to you guys is to complain to the government. They built this plan!”
“You guys are paying for all of this in reduced wages. One of the mandates requires the plan to be affordable for all full-time employees your cost of which cannot exceed 8.39% of family income. Since we don’t know what your family income is the IRS says we can use your income to determine if our plan meets the federal mandate. So, although you think we are paying for your insurance, think again. You are paying 8.39% of your otherwise unadjusted gross pay and don’t even know it. You’ve been fooled all these years”.
“So this plan is not the company’s plan, it’s your plan. And according to the government there are some things you must do and some things you can’t do!”
“But I’ve got some good news for you! We are grossing up your pay by 8.39% and doing away with our group plan! We will take it back and then give it back if you buy an individual policy if that’s what you want to do. A policy that fits your individual needs. A policy that’s not tied to employment. We call it ICHRA!”
