Employer Penalties Starting in 2014 Under Obamacare
From: Real Health Care Reform

The 2010 health care reform law does not mandate employers to provide health care coverage to their employees.  However, starting January 2014, large employers will have to face penalties if they do not offer affordable health insurance coverage to their employees.

Small business owners with less than 50 employees are exempted from penalties. They can even get tax credits toward their health insurance costs.  Tax credits are only available to small businesses with 25 or less workers with an average wage of $50,000 or less.   For employers having full-time workers not exceeding ten with an average wage of $25,000 can get full tax credits. Non-profit employers can get a maximum tax credit of 35 percent of the employer’s premium contributions while for-profit employers can receive at most 50 percent.

You might be wondering why only small employers will be given tax credits.  Based on a survey conducted by the Kaiser Family Foundation, only 49 percent of employers with three to nine employees offer employer-sponsored health care coverage compared to the 95 percent of large employers with more than 50 employees.  If tax credits are provided, small employers will be motivated to provide health insurance policies to their employees.

There are two different scenarios for large employers who do not provide affordable health insurance to their employees:

  • Large employers that do not provide health care coverage and have at least one full-time worker getting health insurance via the exchange.  For this scenario, the employer will be fined an annual fee of $2,000 for every full-time worker but the first 30 employees will be excluded.
  • Large employers who do not offer adequate or affordable coverage with at least one full-time worker getting health insurance via the exchange.  Employers in this situation will have to pay an annual fine of $3,000 for each full-time worker getting a premium credit, with a maximum penalty equal to $2,000 for each full-time employee, but the first 30 employees will be excluded.

What do you mean by unaffordable and inadequate coverage?

Coverage is considered unaffordable if the employee needs to contribute more than 9.5 percent of their family income to employer coverage.   Coverage is inadequate if the insurance does not pay for at least 60 percent of health care costs.

Obama's Reelection Ensures Affordable Care Act Will Remain.


Amid the Presidential election coverage, many front-page stories made mention of President Obama's healthcare policies, namely the Affordable Care Act, concluding that his reelection means the reform law is here to stay. Several outlets also devoted articles exclusively to examining how the ACA will be implemented now that the President has won a second term. All acknowledged that though the law is almost certain to remain in place

Bloomberg.com - About 1.6 million Americans will travel overseas this year for medical procedures ranging from facelifts to heart bypass surgeries, according to the Medical Tourism Association -- a number that is expected to rise 35 percent next year. Some go because they don't have coverage in the US, or their plans don't cover certain procedures.



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