Tag Archives: health insurer tax

Affordable Care Act “ACA Tax” Beats Up California Employers

New Health Insurer Tax, Exchange Tax, Transitional Reinsurance Tax, and Risk Adjustment Tax

The name for each ACA Tax begs the question: “Why are Employers paying for these taxes?”  The public perception, at least in California, is the ACA Tax is a health insurer tax, right?  Effective October 28, 2014, Blue Shield of California notified all small business customers that this ACA Tax is being passed through to employer group plans:

“Today we are mailing a letter to all of our small business customers renewing from February to December 2014 to notify them of the upcoming 2014 taxes and how they will impact their dues and/or premiums.” [Blue Shield of California letter to policyholder, October 28, 2013]

California Marketplace

The Affordable Care Act hits California employers hard

ACA Tax (Part I):

“Beginning on January 1, 2014 the health insurer tax and transitional reinsurance tax will be added to your base medical rate and you will see the increase on your bill.”

  • Health Insurer Tax – est.  1.3% of premium
  • Transitional Reinsurance Tax – est. 2.3% of premium

In addition to this ACA tax cost, two additional Affordable Care Act taxes will be added effective with your 2014 group anniversary date, and will become part of the group premium rate:

ACA Tax (Part II)

  • Exchange Tax – est. .2% of premium
  • Risk Adjustment Tax – est. .02% of premium 

For a big picture look at the effect of the Affordable Care Act in California, read our related story.

For additional employer requirements under the Affordable Care Act legislation click here.  For rate comparisons of new group health plans, click here.  For non-group e.g. individual family plans click this link.

Got questions? Frustrated with the Affordable Care Act?  Life’s too short to waste time with all this:  Request free consumer assistance from Certified Insurance Agents, below: