Hot Topics in Health Care: BUSINESS MANDATE DELAYED ONCE AGAIN FOR MEDIUM SIZED EMPLOYERS
The Obama administration once again delayed a key provision in the Affordable Care Act (“ACA”). The delay will allow employers with 50 to 99 full time employees (2% of all employers or roughly 7.8 million workers) to not offer health insurance (or face a tax penalty), until January 2016. However, large employers, those with more than 100 employees (2% of all employers), will be required to offer health insurance starting January 2015 and employers with less than 50 employees (96% of all employers) are exempt from offering coverage altogether.
The law defines any employee who works 30 hours or more as a full-time employee, and requires employers to offer affordable health insurance to workers and dependents. Affordable is further defined as having premiums no more than 9.5% of that workers income. The fine incurred would be $2,000.00 per worker, if adequate insurance is not provided.
The employer mandate is the cornerstone of the ACA, which was supposed to add millions to the health insurance roles, starting in 2014. In July, the administration announced a reprieve until 2015 for medium sized employers and now the second delay.
The delay was welcomed by many business owners, who were having a hard time figuring out how to comply with the mandate, as the regulations have yet to be ironed out. This will give the administration much needed time to translate the law and provide employers with much needed guidance and direction. The biggest losers are the insurance companies, who were counting on the influx of new participants.
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