Free-Rider Politics
While the ACA does not explicitly require that the employer offers health insurance to its employees, it imposing fines for companies based on the number of workers it employs. In this case, the law considers companies with fewer than fifty employees to be small, while those with fifty or more employees are great. According to the Congressional Budget Office (CBO), employers are expected to pay $ 130 billion in penalty payments over a period of ten years.
From 2014, large companies providing coverage to less than 95 percent of full-time employees are subject to a penalty if at least one full-time employee enrolled in subsidized coverage. This is otherwise known as the free-rider policy and applies to all employers common law, including entities and non-profit organizations of government. Employers must pay a fine of $ 2,000 multiplied by the total number of full time employees at least 30. This excludes the first 30 employees.
Most small companies with fewer than fifty employees are exempt from punishment, and are not required to change their insurance or insurance plans offer all employees to donate, AOT already provide . However various incentives exist to persuade them to offer coverage. If the employer chooses to provide insurance, they may be eligible for tax credits available to the cost of health insurance based on size requirements, salaries and coverage. Credits are available for small businesses with 25 or fewer employees who have annual salaries of $ 50,000 or less, and which contribute at least 50 percent of the premium for a plan in an exchange.
affordable and adequate coverage
Employers are required to provide affordable and adequate coverage. What does that mean exactly? Affordable is defined as costing no more than 9.5 percent of household income employee, OSA. A plan is considered to provide adequate coverage if the actuarial value plan AOS (meaning the share of the total allowable costs that the plan is supposed to cover) is at least 60 percent of a person, AOS medical expenses . In addition, provided insurance must cover dependents (under 26), but not to cover the employee spouse, OSA.
For each employee isn, AOT being provided affordable, adequate coverage and receives a credit / assistance from the federal government to purchase health insurance, the employer is subject to a penalty of $ 3,000 per employee.
employer benefit options
Given these developments, the main issues are how employers structure their employee benefit plans, which they will cover and the contribution they offer to the cost of coverage. Some experts believe that employers may drop health coverage altogether and face sanctions or offer a fixed amount of coverage of specific procedures and tests, called defined contribution plans.
In an attempt to reduce medical costs, employers may offer a health plan company that pays a fixed amount for strict doctor visits and procedures. Also known as the Äòreference price ÃO the employer sets a ceiling on prices based on the average cost for a medical service. This allows employees the opportunity to choose services from a wide range of hospitals and providers eliminate high prices. For health care costs exceeding the amount of the fixed cover, the employee must pay the remaining costs of pocket.
There are pros and cons to every decision, but one thing is certain. With 2014 approaching regularly, employers should start thinking about what benefit packages, if any, they will offer employees in accordance with the Affordable Care Act.
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