In our July 5 post Key Provision of the Affordable Care Act (ACA) Delayed for One Year, we explained that the employer mandate that was due to take effect in 2014 had been delayed for one year.
Since that time, there has been a lot of news coverage on the delay and a lot more coverage from opponents of the law that if the White House elected to delay the employer mandate, then the individual mandate should be delayed as well.
You may have even read that the House of Representatives voted for the 40th time to repeal the Affordable Care Act (ACA). Of course that motion has no chance of passing in the Senate and President Obama said he would veto any repeal.
Let's face it. When a law as complex, far reaching, not to mention controversial as the ACA is implemented, confusion is bound to occur. So we thought it would be helpful to readdress what this delay means.
What We Know for Sure
The Treasury Department delayed the employer mandate for one year. That means employers with more than 50 employees are not required to provide health insurance for their employees until 2015.
The official reason for the delay from the Treasury Department was they heard the concerns of businesses and recognized the mandate was complex and wanted to give employers more time to prepare.
However, there is a mid-term election coming up in 2014 and jobs will be a large part of the discussion. There are some that believe that the White House was afraid that employers might stall hiring so as not to exceed the 50 employee number or that some might even reduce their workforce to get below 50 employees.
At some level it doesn't matter why - it matters that it has happened and that as an employer you have one more year to prepare for the law.
What Else Do We Know for Sure
The individual mandate has not been delayed. The individual mandate requires most individuals to have health insurance or potentially pay a penalty for noncompliance. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt (religious affiliations, those here illegally, etc) from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.
The Kaiser Family Foundation has developed a simple flowchart that illustrates how the individual mandate works.
Therefore, states are in the process of rolling out healthcare exchanges that will allow those individuals who need health insurance to "shop" for coverage from an assortment of government-approved plans. The exchanges will also match individuals with tax credits to make the coverage affordable. Enrollment is scheduled to begin on October 1, with coverage, beginning on January 1, 2014.
The exchanges are targeted to individuals with incomes between 138 percent and 400 percent of the poverty line, or between $15,856 and $45,960 for singles and between $21,430 and $62,040 for couples.
If You're a Small Business
Small businesses will be able to use the exchanges to also shop for coverage. They will be able to take advantage of size-related savings previously available only to large companies.
Beginning January 2014, the ACA will also increase the Small Business Tax Credit. The law implements the second phase of the small business tax credit for qualified small businesses and small non-profit organizations. In this phase, the credit is up to 50% of the employer’s contribution to provide health insurance for employees. There is also up to a 35% credit for small non-profit organizations. Learn more about the small business tax credit.
Learning More About the Exchanges
Unfortunately, one of the biggest issues with the exchanges is that many individuals don't even know about them. Both Governor Christie in NJ and Governor Corbett in PA have refused to support the exchanges which means the federal government will run the exchanges in these states and there will be little outreach at the state level to inform their residents that this option is available.
There is a comprehensive website to learn more about how the exchanges are being operated in your state and how to apply for coverage.
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