How Are the Exchanges Funded?

hscompanies-ppaca_exchange-who-paysOne big question many people have is, “who is going to be paying for the exchanges being setup by the states and federal government”. In reality, the burden will fall upon both employees, who receive coverage through a group health insurance plan, and also those who are eligible to purchase through the exchange.

Starting in 2014, all group health insurance plans will be charged a fee of $63 per participant per year. This fee is charged to the insurance company, but the cost will be passed on to the employer, and subsequently to the employee through an increase in their health insurance deduction.

In addition, insurers who wish to participate in the new exchanges will be charged a 3.5% fee on the premium amount for policies sold through the exchange. Once again, this is a fee that will ultimately be passed on to the individuals purchasing through the exchange.

Employers, employees, and those who may be eligible to purchase through the exchange need to be aware of how these fees will increase their share of the cost of obtaining insurance coverage.

To learn more about the PPACA visit the H&S Companies PPACA webpage or download our February newsletter.

Have questions about how the exchanges will affect your business? Contact HR Manager Travis Sinquefield.

Travis Sinquefield
HR Manager