Bad Actors Rewarded, Good Actors Punished: Like all plans, Taft-Hartleys have eliminated lifetime limits on coverage and now cover dependents until 26 years of age. New ACA rules prohibit plans not already charging a premium for dependents from going back and imposing one. So plans that achieved efficiencies through providing good health care prior to reform are punished. Plans that “solved” financial problems by increasing employee costs before reform are rewarded by continuing to charge high premiums and cost sharing.
• Employers respond to perverse incentives. A year before implementation of the employer mandate:
• Cutting hours. Close to 400 employers announce plans to cut workers’ hours back to less than 30 to stay below the 50-worker full-time threshold, more than a year in advance of the employer mandate.
• Dropping coverage: The IRS arbitrarily defined “affordability” as only applying to employees. In response,
UPS and other major employers eliminate coverage for working spouses.
• Exchanges open. Self-funded plans including Taft-Hartleys are prohibited from offering plans to the public.
• Subsidies begin to flow. First of a trillion tax dollars moves to commercial insurers.
• “Belly Button Tax” imposed. All plans pay $63 per head to ease the transition for insurers offering on the exchanges.
• Aetna, Cigna, United, Wellpoint, Humana and the Big Blues can recoup their taxes because they can offer
plans on the exchanges.
• Taft-Hartleys and self-funded plans can only pay.
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