2014: the End of Group Health

[scagnt83]

This is just me thinking out loud about the changes to employer sponsored health insurance..


First of all, its pretty much a fact that premiums will be going up across the board due to GI, high risk pools, and mandatory decreases in profit margins.

Small businesses can barely afford group health premiums as it is; and they are passing the costs to their employees more and more.
They receive tax deductions of up to 35% if they have 10 or fewer employees, reduced deductions are available for businesses with up to 25 employees. This is contingent upon them covering half of the premiums for employees.
This is all well and good but its only for 6 years. And the last two years, businesses have to purchase through a state exchange to receive the deduction.
So after 6 years all small businesses with 25 or fewer employees will feel the full brunt of increased premiums.


Businesses with over 50 employees who do not offer HI and have at least one employee that receives subsidies for the exchange will be fined $2K for every employee, excluding the first 30 employees.
If they have HI but they have employees who choose to buy from the exchange, they are fined the lesser of $3K per employee who buys from the exchange or $2K per employee.

Businesses with over 50 employees who provide coverage are also required to provide vouchers to employees so that they can buy from the exchange if they choose to.
The voucher will be equal to what the employers contribution is; it will exempt the employer from any fines and it will subtract from any federal subsidies the employee might receive.
So basically businesses will be providing the majority of the subsidies for employees who enroll in the exchange...


But lets look at this from an employers perspective and from a cost containment and business expansion mindset:
A plan that I recently viewed had a per employee premium of $8000 for a family plan. The employer picked up $400 per employee.
So thats a direct cost of $4800/year per employee.
If they choose to let employees enroll in the exchanges they would only incur a $2400/year cost per employee over 30 employees.
For a 5000 person corporation thats a savings of $12 million dollars!!
And considering that people like choice, and the group plan can only give them one choice, many will opt for the exchange. And employers would much rather pay the $2K fine than pay the full cost of HI.

Of course that savings of $12 million will eventually go right back into the system with all of the tax increases to cover this massive insurance restructuring.

 

[ghealthplus]

This is just me thinking out loud about the changes to employer sponsored health insurance..


First of all, its pretty much a fact that premiums will be going up across the board due to GI, high risk pools, and mandatory decreases in profit margins.

Small businesses can barely afford group health premiums as it is; and they are passing the costs to their employees more and more.
They receive tax deductions of up to 35% if they have 10 or fewer employees, reduced deductions are available for businesses with up to 25 employees. This is contingent upon them covering half of the premiums for employees.
This is all well and good but its only for 6 years. And the last two years, businesses have to purchase through a state exchange to receive the deduction.
So after 6 years all small businesses with 25 or fewer employees will feel the full brunt of increased premiums.


Businesses with over 50 employees who do not offer HI and have at least one employee that receives subsidies for the exchange will be fined $2K for every employee, excluding the first 30 employees.
If they have HI but they have employees who choose to buy from the exchange, they are fined the lesser of $3K per employee who buys from the exchange or $2K per employee.

Businesses with over 50 employees who provide coverage are also required to provide vouchers to employees so that they can buy from the exchange if they choose to.
The voucher will be equal to what the employers contribution is; it will exempt the employer from any fines and it will subtract from any federal subsidies the employee might receive.
So basically businesses will be providing the majority of the subsidies for employees who enroll in the exchange...


But lets look at this from an employers perspective and from a cost containment and business expansion mindset:
A plan that I recently viewed had a per employee premium of $8000 for a family plan. The employer picked up $400 per employee.
So thats a direct cost of $4800/year per employee.
If they choose to let employees enroll in the exchanges they would only incur a $2400/year cost per employee over 30 employees.
For a 5000 person corporation thats a savings of $12 million dollars!!
And considering that people like choice, and the group plan can only give them one choice, many will opt for the exchange. And employers would much rather pay the $2K fine than pay the full cost of HI.

Of course that savings of $12 million will eventually go right back into the system with all of the tax increases to cover this massive insurance restructuring.

In response to the above my understanding is that once you elect go into the exchange you cannot get out. This was in the Bill but only those that read it were aware of it. Not a good thing.

 

[somarco]

once you elect go into the exchange you cannot get out.

Kind of like joining the Mafia . . .

 

[Justin Bilyj]

I heard that the Amish and Muslims are exempt from the health insurance bill due to belief systems, any fact in this?
Asamalekim my brothers?

 

[Crabcake Johnny]

There is no specific religious group named in the legislation however it does specifically state that there's a religious exemption:

‘‘(5) RELIGIOUS CONSCIENCE EXEMPTION.—
20 ‘‘(A) IN GENERAL.—Subsection (a) shall not apply to any individual (and any qualifying child residing with such individual) for any period if such individual has in effect an exemption which certifies that such individual is a member of a recognized religious sect or division thereof described in section 1402(g)(1) and an adherent of established tenets or teachings of such sect or division as described in such section.

 

[dgoldenz]

I heard that the Amish and Muslims are exempt from the health insurance bill due to belief systems, any fact in this?
Asamalekim my brothers?

I'm Jewish, can I be exempt from the penalty too?

 

[arnguy]

I'm Jewish, can I be exempt from the penalty too?

I am, too, and tried to get an exemption from those lousy driver's license photos, but I was told I would have to be a member of a recognized sect, i.e., Amish!

During the period I was an IRS Revenue Officer the Amish became exempt from Social Security (FICA) Taxes. Seizing the horse and wagons in Lanacaster County for non-payment of the FICA taxes was fun!

BTW do you think Scientologist would work for any and all exemptions?

 

[ABC]

scagnt83


Where did you get the information that you have to be in the exchange to qualify for the tax subsidy in 2014?

 

[scagnt83]

scagnt83


Where did you get the information that you have to be in the exchange to qualify for the tax subsidy in 2014?

Well, its in the text of the bill first off.
The Kaiser Family Foundation website has one of the best summaries of the bill that I have found. You can even compare it to the other proposals that where out there.
Health bill comparison

Here is a copy and pasted summary from the site of the "Premium subsidies to employers" section of the bill:

Provide small employers with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees with a tax credit.

Phase I : For tax years 2010 through 2013, provide a tax credit of up to 35% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size and average wage increases. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 25% of the employer’s contribution toward the employee’s health insurance premium.

Phase II : For tax years 2014 and later, for eligible small businesses that purchase coverage through the state Exchange, provide a tax credit of up to 50% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost. The credit will be available for two years. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size and average wage increases. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 35% of the employer’s contribution toward the employee’s health insurance premium.

Create a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. Program will reimburse employers or insurers for 80% of retiree claims between $15,000 and $90,000. Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan. Appropriate $5 billion to finance the program. (Effective 90 days following enactment through January 1, 2014)

 

[bill3173]

I'm Jewish, can I be exempt from the penalty too?

Only Sephardic.