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Title: Health Care Reform Bill Impacts - Employer Fines and Employee Subsidies - Big Business to Small Business
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URL Source: http://www.savingtoinvest.com/2009/ ... -care-reform-bill-impacts.html
Published: Dec 28, 2009
Author: Andy
Post Date: 2009-12-28 06:24:12 by Kamala
Keywords: None
Views: 28
Health Care Reform Bill Impacts - Employer Fines and Employee Subsidies - Big Business to Small Business written by Andy on Thursday The WSJ had a very poignant graphic showing how employers and workers could be affected under the recently approved Senate health care bill which requires all citizens and legal residents to purchase a health insurance policy Companies would face fines as high as $750 per worker if even one employee seeks federal help to buy a policy. Yet paying the fine could be more cost effective for companies and their low income workers, than subsidizing employee health insurance. Federal subsidies will be available to people purchasing medical coverage through the state-based insurance exchanges, which are expected to be up and running by 2014. Under the Senate health care bill, most businesses with fewer than 50 workers will be exempt from penalties if they don't offer employee coverage. Democrats say a package of tax credits within the Senate bill will reduce costs for small businesses. Small businesses that qualify would get a 25% tax credit to help pay for employee coverage. The legislation would also allow small businesses to band together to seek coverage at costs similar to those of much larger companies. Under the proposed health care plan, a large portion of these workers could end up getting their insurance through the government insurance, simply because it is more cost efficient for the company to pay the fine rather than provide the health care subsidy. So imagine the impact on the already ballooning US deficit if half these workers move under some form of government sponsored insurance. Other key financial aspects of the Senate Health Care bill: - It is estimated to cost $848 billion over a 10 year period, but lawmakers say it would be fully offset by new taxes and revenues and would actually reduce the deficit by $130 billion over the same period. Notably, the bill would create a government-run insurance plan (a.k.a the public option) to compete with private insurers, but individual states would be able to choose whether or not to offer it to their residents - Beginning in 2014, most individuals will be required to maintain minimum essential coverage or pay a penalty of $95 in 2014, $350 in 2015, $750 in 2016 and indexed thereafter; for those under 18, the penalty will be one-half the amount for adults. There are some exceptions to this requirement. - Federal subsidies will be available to help people afford coverage. The subsidies will be available for people with incomes up to 400 percent of the poverty level, about $88,200 for a family of four. The poverty levels for 2009 is $22,050 a year for a family of four and $10,830 for an individual. - Millions of people, with income up to 133 percent of poverty, will be newly eligible for Medicaid, the health program for the poor. Currently many states set eligibility requirements well below that level of poverty. - By requiring everyone to obtain insurance, hospitals will have fewer cases of uncompensated care. Many people without insurance seek care at hospital emergency centers because they do not turn away patients. When patients are unable to pay, hospitals make up those losses by charging more to those with insurance. Democrats say that pushes premiums higher by about $1,100 a year. - Extend dependant coverage up to age 26. This will probably raise insurance premiums for families. - A qualified health plan will be offered through the new American Health Benefit Exchange, which must provide essential health benefits that include cost sharing limits. No out-of-pocket requirements can exceed those in Health Savings Accounts, and deductibles in the small group market cannot exceed $2,000 for an individual and $4,000 for a family. Coverage will be offered at four levels with actuarial values defining how much the insurer pays: Platinum – 90%; Gold – 80%; Silver – 70%; and Bronze – 60%. I will provide more details as more details emerge from debates and bills on health care reform. So I encourage you to subscribe (free) via Email or RSS to get the latest updates on this credit
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