The Affordable Care Act is almost in full implementation both for groups and individuals. The individual and employer mandate are in currently in place, changing how people view health insurance.
About the Individual Mandate
If you do not have individual health insurance then you will be assessed a 2% penalty on household income, or $325 per person and $162.50 per child.
About the Employer Mandate
The employer mandate is on groups with more than 100 full time employees. They are penalized $2,000 per full time employer if health insurance is not offered. Then there is the affordability portion, if an employee pays more than 9.5% of their household income in premium, the company could be penalized $3,000 if the employee qualified for tax credits on the exchange.
This year is when all of the reporting aspects go into place for employers. This information will determine who is eligible for tax credits and who really has access to employer-sponsored health insurance. On the employer side, the reporting will determine if they are meeting the requirement of the law.
This reporting has created a lot of confusion in industries that have lower paid wage workers. Some of these companies are looking at penalties in the six figure range. Then they have to decide if they want to spend more than what the penalty is to offer an employer sponsored health plan. There are no good options for these industries.
There are only few insurance companies that are still writing mid-size business in Indiana. The process to get health insurance quotes for virgin accounts, has become very extensive. The carriers are not staffed to generate proposals for these accounts that have not offered benefits.
It’s important if you are going out to market for the 1st time, that you have a good idea of potential cost. Right now, it would cost an employer at $4,000 per employee only per year. If you have 120 full time life company, $500K is a realistic estimate of the cost of a fully insured plan.
Unfortunately, companies that are impacted by this, may have to change their business model to stay in business.