The Latest in Health Care
Proponents of the health care overhaul promised that premiums would be reduced by $2,500 under the sweeping new bill. However, an annual Kaiser Family Foundation survey released in September found that health insurance premiums rose by nine percent in 2011. In fact, the Senate Republican Policy Committee calculated that average family premiums have increased by $2,213 so far under the health care bill.
Health Care Reform's Effect on Business
How the New Law Will Impact Your Bottom Line
Even though health care reform legislation—with a true price tag of nearly $2 trillion—is the law of the land, many small business owners are still asking how they will be impacted. The answer is to expect higher costs and more mandates.
What is the cost of the health care law on jobs? Click here to learn more.
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The health care bill forces small businesses to provide health insurance whether or not they can afford it. Beginning in 2014, employers with more than 50 employees will be required to offer coverage or pay a $2,000 fine per employee if just one employee receives a subsidy to purchase insurance through newly created state health insurance exchanges. A firm's first 30 employees will be subtracted from this penalty payment calculation.
Even businesses with more than 50 employees that do offer health benefits will face a $3,000 fine for each full-time employee who opts out and receives a subsidy to purchase coverage through an exchange. Part-time employees are taken into account as full-time equivalents, defined as working 30 hours per week. The total employer penalty is capped at the maximum penalty amount it would face if it did not offer any coverage at all. An employer plan must cover a specific set of services to be determined by the government and meet actuarial standards laid out in the law.
It is estimated that nearly 220,000 small businesses employing more than 26 million workers could be subject to the employer mandate. As premiums rise, some businesses will decide that it makes sense to drop coverage and pay the fine. The Joint Committee on Taxation estimates that employers will pay $52 billion over 10 years in penalties for noncompliance. The Congressional Budget Office (CBO) projects that 3 million fewer Americans will be covered through employer plans in 2019.
REPEAL THE EMPLOYER MANDATE
The Patient Protection and Affordable Care Act of 2010 (PPACA) contains an employer mandate called a “Free Rider Penalty.” In 2014, the law requires employers with 50 or more full-time “equivalent” employees to provide “affordable” insurance to their full-time employees. Employers that fail to do so will likely be assessed a “free rider” penalty.
The U.S. Chamber strongly supports repeal of the employer mandate. Employers want to keep offering insurance to their employees and to grow and prosper. However, the mandate imposes a “one size fits all” requirement on employers, forcing them to offer certain coverage and limiting how much they can charge. This law sends the wrong message by imposing penalties and burdensome regulations on those trying to create jobs, promote growth and rebuild our economy.
By repealing this mandate, we can remove the fear and uncertainty that employers are currently experiencing and allow employers to focus on growth and hiring.
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