The Impact Of The Affordable Care Act On Employees

This paper discusses how the ACA has impacted the employer stakeholder group. Peer-reviewed journal articles will be examined to show how employers have been affected now and into the future, along with how employees are affected as well. Many mandates and changes have influenced and impacted employers in how they handle and deliver health care coverage, as well as impacting their business as well. Many changes affect large employers the most, but small to mid-size employers are also affected as well. This paper will also discuss commonly used strategies and their risks for employers to use in order to help lessen the impact of the ACA.

As the new healthcare law takes effect insurance premiums are expected to rise. On average for the last six years insurances premiums have gone up six percent per year. The average annual cost that employers pay to cover their employees is around $10,000 for each employee. Usually employees are responsible for 20 percent that total or $2000. At this time the new law has done

were already providing health insurance because we’re in a competitive market and that helps us to retain and recruit good employees,” the Sacramento-based small business owner said, . One benefit for small businesses are tax credits“For us it was just good business. But pretty quickly we saw that our firm could benefit from the law. What appealed to us about the ACA were the tax credits and other financial incentives” (Taylor, 3), “A tax credit is an amount of money a taxpayer is able to subtract from taxes owed to the government” (investopedia.com , 1). this is good because businesses that barely make any money don't have to pay much taxes and they can maybe get more popularity due to the money they are saving. This is one example of how the ACA helps Small Businesses since …“ObamaCare creates the Small Business Health Options Program or SHOP, a part of each State’s Health Insurance Marketplace, where small businesses with 50 full-time equivalent employees or fewer can shop for group health plans. Starting on November 15th, 2015 those with 100 full-timers or less can use the SHOP” (www.obamacarefacts.com ,2 ). Small businesses are not required to provide health insurance to their employees if they wish because “... the answer is no. Under the Affordable Care Act, businesses with fewer than 50 full-time equivalent employees are not required to provide health insurance to their employees, and those employers will not face tax penalties if they decide not to offer their employees health insurance” (resources.ehealthinsurance.com, 1).This is good that very small businesses have the freedom not to get insurance because some businesses need to save money because of the expensive previous health care. Despite it being affordable, ObamaCare has given the freedom for small businesses to not give healthcare to employees. “Since health insurance for small business isn’t mandatory under the ACA, small

Those that choose not to get coverage or not under an employer’s plan may have to pay a monetary penalty (ABC News, 2013).

However, for lowering the cost of health insurance, there is a gap between the before cost and the lowered cost. To fill in the gap the government enforces new taxes, specifically, onto the higher-earners. This is bad news for the rich but good news for the lower class. Individual mandate and employer mandate are also enforced. According to the individual mandate, if the lower-classmen can afford the insurance but choose to not purchase one, they are penalized with an annually increasing fee; this fee will help fill in the gap difference. On the other hand, if one cannot afford insurance, he/she can ask for an exemption. For employer mandate, all businesses that have 50 or more full-time equivalent (FTE) employers are required to provide health insurance for their FTE employers or to pay a monthly Employment Shared Responsibility Payment, formerly known as the annual employer mandate fee, which is due annually on the employer federal tax returns. In order to avoid the fees and the hassle, most of the smaller businesses that make the minimal revenue to keep their business going would want to reduce their workforce to fewer than 50 employees, thus, increasing the unemployment rate. Plus, those employees will not receive health coverage from their job. However, note that larger businesses more than likely cannot decrease their workforce and will have to pay the fees or to provide insurance for

Holahan, J., Buettgens, M., Carroll, C., & Dorn, S. (2012). The cost and coverage implications of the ACA Medicaid expansion: National and state-by-state analysis (Publication # 8384). Retrieved from The Henry J. Kaiser Family Foundation: http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8384.pdf

Third, the ACA regulates health care coverage in the United States. According to Lussier et al. (2016), the act mandates that all employers with more than 50 employees provide their full-time employees with health care coverage or face penalties for failing to do so” (p. 494). This act specifies that if organizations choose not to provide employees with benefits, they will be forced to pay a penalty for each eligible employee. However, organizations that do offer employee health and retirement plans must meet minimum requirements and comply with ERISA (Lussier et al, 2016). Employers and employees

The individual mandate is the base of the Affordable Care Act which requires all Americans to obtain health insurance. The fine for not having health insurance would be taken out of your income tax for every month health insurance is not obtained. Sadly, there is only a small window for signing up for this health insurance. There is a certain open enrollment period in which people must sign up by, or they would have to wait until the next period. This means, if a person were to miss the enrollment period, they would have to suffer the fine for the next consecutive months until the next enrollment period. Since 2014, the fee has risen each year. Therefore, Americans who struggle enough to live and couldn’t afford the “affordable” health care would suffer greatly due to the increased fines. An article published by a mix of doctors from across the country shows how these fines are imposed. “There are financial penalties in the form of a new tax on individuals who fail to buy health

If it was not bad enough that the costs for “affordable care” are not so affordable, many companies, businesses, and other places where people work, have cut their employees hours back to thirty or less in order to avoid the new health care laws. The new acts states that any employee working forty hours and up are to be insured by the employer. Many businesses either cannot pay for that, or will not leaving people with smaller paychecks to purchase their own health care as well as groceries, rent, utilities and everything else we need as Americans. Just as well if you cannot find the means to purchase health insurance which (depending on age and income) costs about $6,350 a year, you will be penalized about $900 for not purchasing. Three out of every five Americans state that they would rather take the penalty than pay so much for something that they could

There are two different types of excise taxes that businesses can face depending upon the situation. The first would be the “ "no coverage" excise tax applies if an employee working 30 or more hours per week is offered no coverage or coverage that is less than minimum essential standards, and if the employee qualifies for premium assistance.”(McLeese) The tax is figured out monthly by number of employees minus the first 30 employees multiply by $166.67 and that would figure out that tax. It can be an equivalent of 2,000 a year. The second type would be the inadequate or unaffordable tax which would be applied if the employer offers the minimum essential cover but if it is unaffordable they could be charged a fine. With this tax the employer had to offer health coverage to at least 95 percent of their full-time employees with one of those being a credit employee. A credit employee is someone who gets insurance through either the government market place or through government assistance. The figuring for this tax is almost the same as before but this goes off of the credit employees times 250 which could equal up to 3,000. These are active until 2018 when the tax will increase by 40 percent. Bigger business’ who did not have insurance policies before either have to deal with these new rules and make it work for their employees or face and pay the fines.

Many part-timers are facing a double whammy from President Obama 's health care reform. The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more. But rather than provide health care to more workers, a growing number of employers are cutting back employee hours instead. The result: Not only will these workers earn less money, but they 'll also miss out on health insurance at work.

(Fact Check Admin, 2015) Many of them lost the plans, because their plan did not meet all ten aspects mandated by the ACA. In turn their health care plans were replaced by high priced plans, but the replacement plans provided more benefits. Small businesses are feeling the crunch due to the ACA and are being forced to make a hard decision. Many of these businesses will find it more cost-effective to simply pay the penalty fine mandated by the ACA and allow their employees to find insurance through sponsored exchanges. Small businesses that conduct business in states that provide state-run exchanges, may find they get better plans through that avenue. (Non-partisan Congressional Budget office admin, 2012) As a penalty for not enrolling in a health care plan, those that do not will be charged extra on the taxes. An estimated 4 million people will pat this tax, which will total an estimated fifty four million in tax

Under the PPACA/ACA a.k.a Obamacare, there is a health insurance mandate on small with 50 or More Employees. Businesses with fewer than 50 full-time workers are partially exempt from penalties. So, assuming a small business decides to employ its fiftieth employee, this could be a very expensive hire because businesses that employ 50 or more workers and don't provide health insurance will be subject to a tax penalty of $2,000 for each uninsured employee beyond the first 30.

Obamacare also states that all employers with more than 50 full time workers must provide affordable health insurance or face a fee of up to 2,000 dollars for every full time employee receiving a tax credit minus 30. What is a tax credit? Say, Bob for example, decides that his employer doesn’t offer coverage that fits his personal needs. Bob can go to an exchange and find more affordable coverage that actually covers what he needs it to. The benefit to bob is that he gets coverage and he would also get a tax cut for finding the appropriate coverage for him, hence the tax credit. The bad thing is that now the company faces the penalty for not

It was stated earlier in this paper that big businesses would benefit from this law; however, the exact opposite is true for small businesses. Businesses will be forced to provide healthcare for their employees or pay a fine, something they may not be able to afford. This may result in employees’ hours being cut or even the termination of the employee (“ObamaCare”).