Frequently Asked Questions

Q: What does all this mean for employers?

A: The health care reform package will increase your costs! The bills require employers with more than 50 employees to pay penalties regardless of whether they offer health insurance. It also levies billions in fees on health insurers, medical device makers and pharmaceutical companies. Finally, the bills include very little in the way of meaningful changes on medical malpractice reform, incentivizing providers for quality or quantity, or reforming the small group market. In other words, the cost of doing business will go up and the cost of health insurance coverage will remain on an unsustainable track.

Q: When does the bill take effect?

A: The bill contains a number of different provisions that have many different effective dates. The provisions relating to employers generally will not take effect until 2014. The Kaiser Family Foundation put out solid timeline of the effective dates of the bill’s provisions that can be found here.

 

Q: What is the threshold for number of employees?

A: Employers will pay a penalty if they employ more than 50 employees AND have at least one employee receiving a premium tax credit (a form of assistance the government will offer individuals to help pay for health insurance coverage). Employers that meet the above criteria and DO OFFER health care coverage to employees will pay the lesser of $3000 per employee receiving the premium tax credit OR $2000 per full time employee. Employers that meet the above criteria but DO NOT OFFER coverage will pay a flat penalty of $2000 per full time employee. This provision will take effect in 2014.

 

Q: If I employ less than 50 employees will I be affected by this bill?

A: Unfortunately, the answer is yes. The bill levies "cost of doing business" fees on insurers, medical device makers, and pharmaceutical companies. Those fees will be passed onto the end consumer, which will affect everyone, but especially small businesses.  Additionally, in a couple of years insurers will only be allowed to differentiate rates based on plan design, geography, age (limited), tobacco use (limited) and whether the coverage is individual or for a family. This will force all rates to be in a much smaller range. Those on the less expensive end (younger, healthier) will pay more while those on the more expensive end will pay less (older, high risk). For a small business, this will mean higher insurance premiums.

 

Q: I heard that my insurance plan will be required to cover my dependents up to age 26, is that true?

A: Yes, that is true. Starting in 6 months, insurance plans will be required to cover dependents up to age 26. However, Ohio passed a law last year that will take effect in July 2010 that requires plans to offer coverage to dependents up to age 28. Ohio's law applies to any fully insured plan in Ohio, but does not apply to self-insured plans.