By Jill Cranston Rice and David Whaley
Beginning in 2014, most Americans will be required to have health insurance. That’s right. The Patient Protection and Affordable Care Act (ACA) will require individuals to purchase health insurance or pay a penalty. Individual states like West Virginia are setting up insurance exchanges to allow people to purchase health insurance at a lower cost. Some authorities estimate a person could save up to 18 percent on his or her health insurance premiums by purchasing through the exchange.
Low and middle income Americans can get tax credits to help pay their health insurance premiums, unless they have access to health insurance through an employer, and the ACA imposes penalties on employers who do not comply with the minimum requirements for providing health insurance to their employees.
According to 2010 Census data, 157 million people under the age of 65 maintained their health insurance coverage through their employer or as dependents of a covered employee. The primary goal of the ACA, however, is to provide insurance to those without access to insurance, so Congress developed a web of incentives and penalties for individuals and employers to support the objectives of the ACA while not adversely affecting the existing employer-sponsored health plan system.
Employers have several important decisions to make when the significant provisions of the ACA take effect. For example, most employers will be subject to the pay or play requirement, meaning they have to offer health insurance coverage to their employees or pay a penalty. There are significant factors that drive employee benefit considerations, and the ACA treats different-sized employers differently. Here you will find an over-simplified, nuts and bolts, at-a-glance cheat sheet.
The standard “This is not legal advice” disclaimer applies since regulations for a number of these provisions have not yet been released and currently are undergoing further regulatory revision. These are factors employers should consider based on the major tenets of the new law.
