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The federal government could soon saddle employers with a new health benefits administration problem: 400,000 workers who no longer can get as much government help with paying for Affordable Care Act public exchange coverage but who officially earn too little to pay for their employers' health coverage.
Phillip Swagel, director of the Congressional Budget Office, mentioned the concern Monday in a summary of CBO predictions about how new ACA regulations and the expiration of temporary premium subsidy increases will affect Americans' access to health coverage.
A federal judge in Maryland, U.S. District Judge Brendan Hurson, issued a ruling Friday that temporarily pauses implementation of most of the regulations.
Related: Federal judge pauses ACA rule that would have ended coverage for 1.8M people
If the courts let the U.S. Department of Health and Human Services move forward with implementing regulations and the current premium subsidy levels expire, 1.8 million people could lose their health coverage, according to an estimate included in the memorandum explaining Hurson's ruling.
"About 400,000 (or 22%) of the 1.8 million people will have access to employment-based coverage that, although subsidized, is considered unaffordable for the purpose of determining eligibility for the premium tax credit," Swagel wrote in the report.
In some cases, employers with more than 50 employees may end up owing penalties if the employees' share of the premiums for their health benefits exceeds official government affordability thresholds for too many employees.
The CBO did not provide estimates of how ACA exchange plan subsidy access changes might affect employers' penalty bills.
The backdrop: Swagel wrote to three Republican House leaders — Rep. Jodey Arrington of Texas, the chairman of the House Budget Committee; Rep. Brett Guthrie of Kentucky, chairman of the House Energy and Commerce Committee; and Rep. Jason Smith of Missouri, chairman of the House Ways and Means Committee — in response to their question about how the new ACA regulations and the expiration of current ACA premium subsidy levels would affect health coverage access.
Premium subsidy levels are set to fall because of the end of an emergency increase Congress included in COVID-19 emergency response legislation.
Originally, the subsidies were available only to people in households with income under 400% of the federal poverty level, and only if their share of the premiums would exceed about 9% of their income.
COVID emergency legislation made subsidy levels more generous and expanded access to people who earned more than 400% of the federal poverty level, if calculations showed that premiums would eat more than about 9% of their income.
In a separate move, HHS has developed "market integrity" regulations in response to critics' concerns that some exchange coverage users have lied about their income or other characteristics, such as home address or status as Native Americans, to qualify for extra subsidies or the ability to enroll for coverage outside of the usual annual enrollment period.
In other cases, critics say, crooks have changed people's coverage or signed them up for new coverage without their knowledge.
Some of the new market integrity regulations require ACA exchange programs to do more to verify applicants' eligibility.
The regulations also require enrollees to pay at least $5 per month for coverage, in an effort to ensure that the enrollees will notice whether they are enrolled in coverage and speak up if crooks have signed them up for coverage without their permission.
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