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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: If the individual mandate in the Patient Protection and Affordable Care Act (ACA) were lifted, premiums in the individual market likely would increase by 12.6%, with an estimated 7.8 million individuals losing coverage under the law, according to research from the Lewin Group. The study, Without the Individual Mandate, the Affordable Care Act Would Still Cover 23 Million; Premiums Would Rise Less Than Predicted, published in the online journal Health Affairs, noted that if this occurred, the ACA would still cover 23 million individuals who would have been uninsured without the law.
The ACA requires most Americans to have health insurance as of 2014 and imposes a penalty on most who do not comply. Federal appeals courts have issued conflicting rulings on the constitutionality of this individual mandate. Although several courts have upheld the constitutionality of the law and the mandate, as of October 2011, two appeals courts have declared the mandate unconstitutional. It is now expected that in early 2012 the Supreme Court will consider the fate of the individual mandate.
The Lewin Group considered the argument that the individual mandate is essential to averting a “premium spiral”, in which premiums increase rapidly and the number of people with coverage decreases. A premium spiral occurs when people with relatively low expected health care costs elect to forgo insurance, leaving only higher-cost people with coverage. According to some health policy analysts, the insurance reforms in the ACA could contribute to a premium spiral if the mandate were removed.
However, the premium subsidies provided under the ACA would help restrain a premium spiral by absorbing much of the impact of premium increases, according to the Lewin Group. The Congressional Budget Office found that about two-thirds of people with nongroup coverage under the ACA would receive premium subsidies. “Thus, any increase in the premium for that plan results in increased subsidy amounts, which will cover much or even all of the increase in premiums, depending on the plan a family has selected,” the Lewin Group noted. “Our modeling suggests that this automatic boost in subsidy would tend to help retain both healthy and unhealthy subsidy-eligible people in nongroup plans, thus moderating coverage loss and premium increases.”
The Lewin Group estimated that eliminating the mandate and penalty while retaining the prohibitions on preexisting conditions and other insurance reforms in the ACA would induce a premium spiral that would ultimately increase nongroup premiums by 12.6% before leveling out. The analysis noted that the number of uninsured people under the ACA as written would be approximately 20.7 million people, compared to 28.5 million people if the mandate were eliminated. This is an increase of 7.8 million uninsured people, if the individual mandate were lifted.
The study simulated the effect of the ACA with and without the individual mandate using a health benefits simulation model, which was based on data from the Agency for Healthcare Research and Quality’s Medical Expenditure Panel Survey. For more information, visit http://content.healthaffairs.org/content/early/2011/10/24/hlthaff.2011.0708.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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