ACA Paperwork Poses a Big Problem for Businesses

By Janet Trautwein

Fewer and fewer employers are offering health benefits. In 2001, 68 percent of firms sponsored health plans. Last year, that share dropped to 53 percent.

Part of the problem is that insurance premiums have soared, pricing many employers out of the market. For businesses with fewer than 200 workers, the average health plan cost about $2,900 per worker in 2001; it cost more than $6,400 last year.

But pricier policies aren't the only reason that health benefits have grown less common. Onerous government regulations have had a huge impact. Compliance costs keep climbing -- and many firms are nearing a breaking point. They need relief so they can continue to offer health insurance to their employees.

Currently, employers have to file a number of reports with the IRS each year -- many of which have different deadlines. For instance, all employers with more than 50 workers must report the value of health insurance coverage provided to each employee.

Firms with more than 50 employees must also certify that they offered a minimum level of coverage to each full-timer. And they have to provide detailed information on the share of the cost of coverage that each employee was responsible for. They must also collect the Social Security numbers of workers' dependents.

If these reports are submitted incorrectly or at the wrong time, employers face steep fines that can reach hundreds of thousands of dollars.

The cost of filing extra paperwork may not be a problem for large companies, but medium-sized businesses lack the resources. Two-thirds of all employers rely on outside organizations to help with reporting requirements.

Fortunately, lawmakers have introduced bipartisan bills to simplify some reporting requirements for employers who offer health insurance.

H.R. 3919 and S. 1908 -- the Commonsense Reporting Act -- would move employers to a voluntary reporting system and decrease the amount of information requested by the IRS and other agencies.

These changes would save businesses time and money -- thereby enabling them to continue offering benefits or resume offering insurance if they had ceased to do so. That'd be great news for employees.

The bills would also help medium-sized firms compete with their larger rivals for talent. One study found that 88 percent of workers would give a lower-paying job "heavy" or "some consideration" if it offered better health benefits than a higher-paying job.

Medium-sized businesses are the lifeblood of the American economy. Nearly half of all workers draw their paychecks from firms with fewer than 250 employees.

The federal government can lend businesses -- and workers -- a helping hand by streamlining burdensome reporting requirements.

Janet Trautwein is CEO of the National Association of Health Underwriters (www.nahu.org).

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