The Patient Protection and Affordable Care Act (PPACA) might create a benefits world in which typical employers pay penalties and send employees streaming into government and private exchanges to buy individual health insurance.
If PPACA survives its many foes, takes full effect in 2014, and works more or less as drafters expect, it could breathe new life into the defined contribution health plan concept, by requiring health insurers to sell coverage to individuals on a guaranteed-issue basis. Insurers could charge three times as much for the oldest enrollees as they charge for the youngest enrollees, but they would not be able to consider health problems, such as cancer or kidney disease, when setting rates.
PPACA is supposed to create a new health insurance purchase tax credit for people who have no access to affordable employer-sponsored health coverage and earn from 133 percent to 400 percent of the federal poverty level (FPL), or about $29,000 to $88,000 for a family of four.
Traditionally, health insurers have marketed to brokers, brokers have golfed with employers, and employers have generously and magnanimously provided health benefits for the employees.
“Health insurers have not been able to invade that ownership they [brokers] have over these employer relationships,” Maynard says.