PPACA Free Choice Vouchers Repealed
Vouchers Defunded as Part of Budget Deal
April 15, 2011
Free Choice Voucher Program
Employers that offer coverage would have been required to provide any employee with income less than 400% of the poverty level a free-choice voucher if the employee’s cost of coverage under the employer-sponsored plan was more than 8%, but less than 9.8%, of such employee’s household income.
President Obama signed the final federal funding bill for the remainder of this year on April 15. The legislation, among other things, eliminated a provision in the Patient Protection and Affordable Care Act (PPACA) known as the Free Choice Voucher program. The provision was set to be implemented in 2014 along with the new state health care exchanges. The vouchers would have provided subsidies for certain employees to purchase health coverage through exchanges if their employer’s plan was defined as not affordable.
Congressional leaders and the Obama Administration agreed to reductions in current year spending $38 billion below last year in order to avert a federal government shut down that would have begun on April 8.
Cigna continues to support health care reform’s goals of enhancing access, lowering cost and improving health for all Americans. Eliminating the free choice vouchers will reduce one administrative complexity for employers that offer benefits. Affordability of the employer plan remains a consideration, however, since just one employee qualifying* for federal premium assistance for exchange coverage will trigger a penalty for employers with 50 or more employees.
A healthier, more productive workforce is critical to an employer’s ability to maintain or lower health care costs. We
fully support employer efforts to drive positive change in and out of the workplace.For more information on this change and the latest reform news, please visit www.InformedonReform.com.
* Under PPACA, an employee is eligible for a federal tax credit to help pay for their health coverage if the employer sponsored coverage either (i) "doesn't provide minimum value," or (ii) “is unaffordable” (i.e., the employee share of the premium exceeds between 2%and 9.5% of the employee’s income, based on percentage of the poverty level).
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