Employer-Paid Vouchers Axed

Lobbyists succeeded in helping to repeal the healthcare reform voucher provision, as part of the recent budget deal, though the provision actually had no short-term impact on government spending.  However, the provision would have had a big impact on employers.

What are the vouchers?

The free choice vouchers are paid for by employers, and given to low-paid employees who opt to purchase coverage from state health insurance exchanges versus from their employers. The amount of each voucher is equal to what the employer would pay to have the employee enrolled in the “largest premium contribution” plan.  The employee could then use the voucher to purchase state health insurance.  If the state plan costs less than the voucher, the employee could packet the extra cash, minus an income tax.  The exchanges were set to take place by 2014.

Who qualifies for the vouchers?

Employees whose family income doesn’t exceed 400% of the poverty level, and whose employer-required premium contributions fall between 8% and 9.8%, are entitled to the employer-funded vouchers. 

What would this provision mean for employers?

Employers with large numbers of low-paid workers would obviously be most affected.  Employers who offer more expensive plans would also pay more, since the voucher amounts are based on the best/most expensive plan.

For now, this particular provision is axed, and many mid- to large-sized employers are grateful.