PPACA has major consequence to the employer group plans over 50 lives.
PPACA spawns a new form of wage discrimination I had to re post this blog posting because it show some unintended consequences of the reform.
Under the new law if a group over 50 lives has a group health insurance plan in place it is illegal for the employee to pay more than 8% of their house hold income towards health insurance premium. Sounds great right? Wrong!
So the if the avg health insurance premium is $20,000 in 2014 and there are two employees. One employee has a house hold income including benefits of $100,000 and the other one has a total of $30,000. The $100,000 employee will by law pay no more than $8,000 a year for health benefits and the employer picks up the additional $12,000. The other employee making $30,000 total house hold income will only pay $2,400 leaving $17,600 on the employer.
If the employer decided to keep a health plan why would they hire lower wage workers? Why would an employer want to be over 50 employee and face these kind of consequences?
There will be no mid size group health plans with these consequences.