Posts

Survey Shows 10% of Employers Anticipate Dropping Health Care Benefits



Employer

With medical costs on the rise, employers are exploring health care coverage alternatives.

According to an article on the Los Angeles Times website, a new survey shows 10% of employers anticipate dropping health care benefits for their employees. The survey, by consulting firm Deloitte, found 81% of employers plan to continue offering health benefits and another 10% weren’t sure what they would do.

According to the article, more employers are exploring new ways to provide health care benefits to their employees. Some are looking into defined contribution plans or trying to negotiate with local health care systems directly.

Source:  Nearly 10% of employers to drop health benefits, survey finds, LA Times

Congressional Budget Office Releases New Estimates for Cost of Affordable Care Act

Calculations

The CBO released their estimation for how much Medicaid will cost under the Affordable Care Act

On Tuesday, the Congressional Budget Office (CBO) released new estimates regarding the cost of the Affordable Care Act’s insurance coverage provisions, which takes into account the Supreme Court decision issued on June 28, 2012.

The CBO estimates that Medicaid will cost $1,168 billion from 2012-2022, rather than the previously estimated $1,252 billion. They believe fewer people will enroll in Medicaid because more people will seek insurance through newly established exchanges and more people will be uninsured.

To view their full decision read, Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision.

You May Keep Your Dependent On Your Insurance for 26 Years



Because of changes enacted by the Affordable Health Care Act, health care coverage for an employee’s children, through age 26, is generally tax-free. Employees who are eligible to contribute to cafeteria plans are allowed to make pre-tax contributions to pay for this expanded benefit. The IRS considers a child to be one’s son, daughter, stepchild, adopted child, or eligible foster child.

Additionally, the Affordable Care Act requires that dependents being provided coverage via their parent’s plan be eligible to remain on that plan until they reach age 27.

For more information read, Tax-Free Employer-Provided Coverage Now Available for Children under Age 27

 

Health Insurance Premium Credit Highlights



Health Insurance Form

The health insurance premium credit is designed to make health insurance affordable to taxpayers whose household income is 100% to 400% of the federal poverty level.

The IRS issued final regulations on the health insurance premium credit scheduled to go into effect in 2014. Here are a few highlights:

  • This coming June, the Supreme Court will rule on the constitutionality of the Affordable Health Care Act, and may throw the whole thing out.
  • The credit is designed to make health insurance affordable to taxpayers whose household income is 100% to 400% of the federal poverty level (FPL). In 2011, the FPL for a two-person household was $14,710 and $22,350 for a four-person household. So, this credit will affect those with income up to $58,840 in a two-person household and $89,800 in a four-person household.
  • Those who are eligible, will purchase coverage through the Affordable Insurance Exchange. The Exchange will then make a subsidized payment to the qualified health plan on behalf of the eligible person.
  • The amount of the subsidy is based on information given at the time of enrollment and is the lesser of the premium for the qualified health plan, or the excess of the premium for the benchmark plan (the second lowest “silver plan”) over the applicable percentage of household income.  The CBO estimates the average subsidy to be over $5,000 per year.
  • At tax time, the individual will reconcile the actual credit for the tax year computed on the tax return with the amount of advanced payments.  The difference becomes a tax due or refund. There is a cap on the repayment of $600-$2,500.
  • An employee who is in an employer-sponsored plan, that is deemed as non-affordable, would also qualify for the subsidy. A plan is considered non-affordable if the employee is required to contribute 9.5% or more of his household income.
  • Large employers will be penalized if even one fulltime employee is certified to receive the credit because the employer sponsored coverage does not provide minimum coverage or is unaffordable to the employee.  The employer uses 9.5% of the employees wages instead of household income in figuring the penalty.

Please keep in mind, there will be more regulations to come clarifying how to calculate this credit and penalty. If you have any questions please contact Mike Farmer at 231.798.6503.