OPINION -- Almost no political topic within the last year generated as much interest or conversation as the Affordable Healthcare Act (ACA), more commonly known as Obamacare, a topic that Pew Research reports gets as much as 40% of the airtime for some cable news channels in a given cycle. Yet for all the hot air generated amongst television, radio, and newspaper pundits, some topics of Obamacare remain a mystery, especially for employers who will need to provide the financial backing for their employees' coverage. What lies ahead in 2014 for small-, medium-, and large-business owners?
Penalties For Non-Compliance
One of the issues that gained attention prior to the implementation of the ACA involved the penalties for individuals who opted out of the coverage and had to pay a fee for the privilege of doing so. Business owners fare no differently, since a company with over 50 full-time employees must provide coverage under the new law, and faces a fine of $2,000 per employee per year if they fail to do so. In addition, employers must provide "affordable" coverage, defined as no more than 9.5% of an employee's income,that meets minimum coverage requirements. They face the same penalty of $2000 if they sign up their employees for a coverage plan that one or more cannot afford or that provides insufficient coverage. However, the government has postponed the reporting requirements and assessment of penalties for employers until the beginning of 2015.
Subsidies
Although the Affordable Care Act will require both employees and employers to pull money out of their own pockets in order to provide coverage, it may not have as large a financial impact as some had feared. A person earning income below or near the poverty level of approximately $12,000 per year will be eligible for certain subsidies in order to make up the difference, with an average subsidy of $5,000 per year (4). Other subsidies help smaller businesses (who have less than a few dozen full-time workers) with a tax credit to provide coverage.
New Jobs, New Opportunities
Much of the attention of healthcare reform has been paid towards the money going into the system instead of where it will head out. As Americans sign up for coverage, healthcare-related jobs will see a huge surge with new streams of revenue. According to Carrington.edu, one particular field, medical billing and coding/health information technology, is expected to grow 22% by 2022, as more employees are needed to handle the paperwork and communication between physicians and insurance providers. As demand for these workers rises, so too will employee pay, especially for the most skilled candidates.
Insurance And Premiums
Any insurance plan purchased on the federal market system at healthcare.gov operates just as it would a year or a decade earlier: the policy provider gives coverage while the policyholder pays for both premiums and deductibles. One major difference, however, involves the payouts of premiums themselves. Starting in 2014, insurers can spend no less than 80% of income from premiums on coverages, meaning that less of the money paid out to a company goes towards operations like salaries, overhead, advertising, and so on. An employer will receive money back in the event that their insurance company spends less than 80% on coverage in a given billing cycle.
The Final Word
Starting in 2014, employers must provide coverage or pay for the privilege to not do so. Those who do not will face fines; those who do may be eligible for tax credits. With new insurance revenue coming in, the economic outlook for the healthcare industry looks strong, with new job opportunities for select professions.
Monica Gomez, a freelance writer, covers topics related to healthcare, health, education, and travel.
