The Affordable Care Act (ACA) also known as ObamaCare, is a long and complex piece of legislation that attempts to reform our healthcare system. The last significant piece of this legislation will be implemented on 1/1/2014. The effectiveness of this program is yet to be determined but will also have an impact on our Workers Compensation System based on its effectiveness and implementation. Find out how the Affordable Care Act affects workers comp insurance here.
Affordable Care Act and
Workers Comp Insurance
- – Medical care remains an extremely significant component in overall benefits provided by workers compensation insurance. As employees become insured through their individual or group health programs, there may be a reduction in fraudulent workers comp claims.
- – ACA is a Federal law and Workers Compensation laws and regulations are enacted at the State level. ACA is a step toward federalization of the Workers Compensation system.
- – According to ACA, a $2k/employee penalty will be imposed on employers with more than 50 employees who do not offer health insurance to their full time workers (as amended by the reconciliation bill). “Full time” is with respect to any month, an employee who is employed on average at least 30 hrs of service per week. Some large corporations have already stated that their intention will be to limit the number of hours their employees work to less than 30 hours per week in order to avoid having to act on the mandatory health care provision under the new law which goes into effect on 1/1/2014. We see this in the banking and restaurant industries as well as others. As employees are given less hours of work, they will then be required to purchase their own health insurance plans as required by ACA. This could put pressure on claims back into the Workers Compensation system.
- – The ACA promotes wellness programs, which could impact workers compensation and disability should employees become more healthy thereby reducing workers comp claims.
As seen in the few examples above, early evidence suggests that reform may reduce medical costs now absorbed by the workers compensation systems. The decrease in number of uninsured American could prompt cost shifting – reducing costs in the workers’ compensation system as more Americans use their health insurance to cover injuries stemming from work.
ACA does not directly address Workers Compensation but could have an indirect impact on the Workers Compensation system. Much will depend on how well ACA works as intended by its authors.
For more information on the Affordable Care Act and its impact on Workers Compensation Insurance…
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