The Affordable Care Act (ACA) has caused many changes that strongly favor the individual health insurance market. This in turn has made optimal insurance solution for many small employers, employer-financed individual health insurance. This item to be an overview of the four key ACA changes that have caused many small employer their group fall plan in favor of reimbursement of employees individual health insurance premiums.
1. Guaranteed issue individual health insurance
The ACA pre-existing conditions exclusion ( "Guaranteed Issue") provision prohibits health insurance companies from denying coverage to individuals because of a pre-existing condition. This provision, known as "guaranteed issue" simply means insurance companies and employers can not limit, exclude, or deny coverage to employees based due to a health condition that existed before the effective date.
2. provide the employer shared responsibility provision applies only to large employers
The employer shared responsibility provision, which is also known as ESR or the employer mandate the requirement for larger employers either health insurance for employees or pay a fee if / when an employee buys subsidized health insurance through the Marketplace.
Small employer the employer is subject to shared responsibility, and are therefore not required to provide health insurance for their employees. The penalty does not apply to companies with fewer than 50 FTEs.
3. premium tax credits for individual health insurance
The federal government provide rebates on individual health insurance for individuals and families who qualify. These discounts are "premium tax credits" or the "premium subsidies" and the health insurance marketplaces acquired by any State for the policy available to run
The authorization for this premium tax credits based on the following factors. :
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income requirements: can earn families to 400% of FPL (Federal Poverty Line) for premium tax credits
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budget into consideration size: income requirements are also dependent on how many family members live in a household; earn for example a person to $ 46,680 in 2014 would be eligible for a premium tax credit, while a family of four to $ 95,400 would earn in 2014 for a premium tax credit
- [1945006förderfähig] access to affordable health insurance: those would be by their employer or a government program like CHIP, Medicaid, Tricare, etc. not already qualified for a premium tax credit
For more information on Premium tax credits can be found in this manual.
4. Individual shared responsibility
If an individual health insurance to buy the precipitates qualified as minimal coverage and do not qualify for an exemption, it will pay the individual shared responsibility payment. The fee will be calculated in two ways, and the individual is required to pay, whichever is higher:
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One percent of annual household income: the maximum penalty is the national average premium costs. for a bronze plan
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$ 95 per adult and $ 47.50 per child under 18 years. the maximum family penalty $ 285
, the penalty will increase each year:
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In 2015, the fine of 2% of annual income, or 325 $ per adult
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In 2016 the punishment. be 2.5% of annual income, or $ 695 per adult.
Why these four ACA changes Favor employer-funded Individual
1. Individual health insurance is guaranteed issue, and the elimination of non-economic factors of a decision-making process of the employer. This ensures that every employee has access to affordable health insurance, regardless of the employment.
2. Most employees will pay less for health insurance on the individual market through contribution tax credits.
3. For small employers with less than 50 FTE employees, there is no employer shared responsibility and no penalties. This is the reason why many small employers fall to help the health of individuals, pay group health insurance for employees insurance premiums.
What do you think about the way the ACA individual health insurance has made more attractive?
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