Health Care Reform Basics

As of January 1, 2014, the Patient Protection and Affordable Care Act will require all individuals in the United States to have some form of health insurance. Integral to this reform, is the creation of state, regional and federal health care Exchanges, where individuals can purchase a variety of affordable health insurance plans and, if they fall within certain income levels, receive government-subsidized premiums.

This Act affects all businesses; however, large employers with 50 or more full-time equivalent employees will be required to:

A. Provide affordable health insurance coverage for all full-time employees,
B. Elect not to provide health insurance coverage, pay defined penalties, and send employees to a state, regional or federal Exchange to purchase insurance, or
C. Develop a new hybrid plan.

Employers who elect not to provide health insurance coverage will be assessed a penalty of $2,000 annually per full-time employees, minus the first 30 full-time employees if at least one employee receives an Exchange subsidy. Additionally, if an employer’s coverage is deemed unaffordable, the employer will be fined $3,000 for that employee.