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Few employers against federal health premium subsidies

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Few employers against federal health premium subsidies

Less than 30% of employers favor ending federal premium subsidies to lower-income individuals obtaining health care coverage in federal exchanges, according to a new survey.

Asked their position on more than half a dozen possible changes to the Patient Protection and Affordable Care Act, the one that drew the least employer support was ending the subsidies now offered to the lower-income uninsured obtaining coverage in the federal exchange, according to the Mercer L.L.C. survey of nearly 600 employers conducted last month.

Just 27% back such a change, while 31% were opposed and 42% had no opinion.

The legality of those subsidies is currently before the U.S. Supreme Court, which heard oral arguments this week in King v. Burwell, which aims to strike the subsidies down for enrollees in the exchanges run by the federal government in 37 states.

If the court strikes down the IRS regulations that permit the subsidies, roughly 87% of those who have selected plans in the exchange — or about 7.5 million people — would lose the subsidies.

“If the Supreme Court disallows the federal subsidies, the impact will be felt beyond the millions of individuals currently receiving subsidies,” Tracy Watts, a Mercer senior partner in Washington, said in a statement.

Employers could be affected if there is a spike in the number of uninsured and providers, hit with uncompensated care costs, shift those costs to insured patients covered in employer plans, as they have done in the past, observers say.

On the other hand, 80% of employers favor repeal of an ACA provision that imposes a 40% excise tax on high-cost health care plans. The so-called “Cadillac” tax, effective in 2018, will apply on health care plan premiums that exceed $10,200 for individual coverage and $27,500 for family coverage.

In addition, 64% said they want the health care reform law's employer mandate to be repealed. Under that provision, employers — except for smaller firms that are exempt — not offering coverage are hit with a $2,000 penalty for each full-time employee.

A majority — 59% — of employers want to see the ACA's definition of a full-time employee bumped up to those working an average of 40 hours per week. The law now defines full-time employees as those working an average of 30 hours per week.

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