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How Obama Care Is Impacting the Cost of Health Insurance for Businesses?

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How Obama Care is impacting the cost of health insurance for businesses

The Affordable Care Act (ACA) offers incentives to small businesses with less than 25 full-time employees, making less than $50,000 in annual wages.  These incentives are to help the businesses provide health benefits to their employees.  According to the ObamaCare small business facts website the majority of employers and employees won’t pay any additional taxes.(1)  

The ACA is providing generous tax credits to businesses with 25 or less full-time employees but larger companies have to pay new costs.  For those employers that have 50 or more full time employees that do not provide health insurance to their employees they will pay a $2,000 fee per full-time employee.  There is a subtraction of the first 30 employees.  For those employers with 50 employees or more who do not provide the minimum value or it isn’t affordable, the fee is the lesser of $3,000 per full-time employee receiving subsidy, or $2,000 per full-time employee. (2)

The Congressional Budget Office estimates the required coverage will cost $5,800 a year or more in 2016.  That works out to be an extra $3.00 per hour.  With 100 employees that will work out to be $12,000 for a company just for one 40 hour work. (3)

The cost of ObamaCare is not just in fees and tax incentives.  There is additional time and expenses for the company with the set up, maintenance, and day to day operations of ObamaCare.  For employers with over 200 employers the employer must automatically enroll new employees regardless of other coverage.  The new hires have the option of opting out of the insurance.  The new rules also regulate that the employers can longer have waiting periods of more than 90 days.  Also, with the implantation of ObamaCare employers can no longer have a passive enrollment.  Every company must have an active enrollment for every employee.  Benefit plans had to be reconfigured to accommodate these changes.  What this means for employers is that during the implantation year there was additional work in the set up.  This includes extra expenses in communicating, whether through forums, handouts, or mailings, the changes.  Some companies had kiosks, extra staff and extended hours during open enrollment available to assist employees during these challenging times.

It is also required that employers must also provide new hires the summary of benefits during open enrollment.  All these additional things that companies are required to do have a cost associated with them.  

The cost isn’t just with employers.  Premium increases were much higher in some states than others.  Insurance rates in Washington have grown 588 percent since December 2012.  This is thought to be due to small sample size and additional state regulations.  The rates in others states may not have risen quite this much but they have risen.  These costs are being passed on the employee in some way or another.  Some employers are passing on the cost to workers while others are raising the copayments, deductibles and still some are boosting the cost for dependent care. (4)  All these increases are affecting people being seen by a physician for their medical needs.



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