MAR 2013 – Understanding the Affordable Care Act

Starting in 2014, almost everyone will be required to be insured or pay a fine. There are subsidies to help people who can’t afford coverage. Most employers will face fines if they don’t offer coverage for their workers. Newly created insurance markets will make insurance accessible for individuals and small businesses. And Medicaid will be expanded to cover more low-income people.

Insurers will be prohibited from denying coverage to people with medical problems or charging those people more.  An assortment of tax increases health industry fees and Medicare cuts will help pay for the changes.

The following may help you answer questions that you might have and help you better understand your role as an employer as the 2014 Federal ACA mandate approaches.

Does the employer have at least 50 full time equivalent employees?

If NO  Penalties do not apply to small employers

{If the employer has 25 or fewer employees and average wages up to $50,000.00 it may be eligible for a Health insurance tax credit.}

If YES  Does the employer offer coverage to its workers?

If NO   Did at least 1 employee receive a premium tax credit or cost sharing subsidy in an exchange?

If YES  The employer must pay a penalty for not offering coverage.

{The penalty is $2000 annually times this number of full-time employees minus 30. The penalty

 is increased each year by the growth in insurance premiums.}

 

Does the insurance pay for at least 60% of covered health care expenses for a typical population?

If NO   Employees can choose to buy coverage in an Exchange and receive a premium tax credit.

The employer must pay a penalty for not offering affordable coverage.

{The penalty is $3000 annually for each full time employee receiving a tax credit up to a maximum of$2000 times the number of full time employees minus 30. The penalty is increased    each year by the growth in insurance premiums.}

If YES  Do any employees have to pay more than 9.5% of family income for employer coverage?

If YES  Those employees can choose to buy coverage in an Exchange and receive a premium tax credit.   The employer must pay a penalty for not offering affordable coverage.

{The penalty is $3000 annually for each full time employee receiving a tax credit up to a  maximum of $2000 times the number of full time employees minus 30. The penalty is increased    each year by the growth in insurance premiums.}

If NO   There is no penalty payment required of employer since it offers affordable coverage.

 

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