Insurance agents and employers are breathing a sigh of relief that Congress has repealed a health care reform law provision that would have required employers to offer low-income employees so-called “free-choice” vouchers starting in 2014.

According to officials at the National Association of Insurance and Financial Advisors, this provision could have “potentially hurt” an employer’s insurance risk profile if too many young, healthy workers qualified for vouchers to buy insurance through newly created exchanges.

That’s because it would leave the employer plan “with too many older, sicker workers,” NAIFA officials say.

Included in the 2011 budget agreement passed by Congress on April 14, the provision would have affected low-income employees whose employer-provided health insurance premiums cost between 8% and 9.8% of household income. The employee could have then used the vouchers to purchase health insurance in the exchanges and keep excess amounts tax-free if the voucher exceeded the cost of health coverage.

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Health Care Reform