Employers’ Role in Affordable Health Care

Democracy is at the heart of what makes our nation great, and the last election demonstrated that we still believe in the power of the ballot box. However, with politics comes controversy, and some themes may sway even the most apathetic of people. The Affordable Care Act remains a particularly painful issue (ACA). This problem, and its ongoing difficulties, may have a significant impact on you as a person and as an employer.

The ACA is now in the spotlight again, with discussions and concerns surfacing in response to the Supreme Court’s ruling earlier this month that tax credits that support health care bought via federal exchanges may be rejected. In states that choose not to set up their own exchanges, the credits constitute a critical component of health-care reform. If the court rules against them, millions of Americans’ health-care coverage may be jeopardised.

According to the Obama administration, the issue is that “the subsidies restrict the cost of coverage to no more than 9.5 percent of one’s income for those who qualify.” Subsidies recipients paid an average of $82 per month, compared to $346 without support.” Furthermore, they said that around 87 percent of people who signed up for Obamacare insurance via HealthCare.gov got these subsidies.

But the complexities don’t stop there. A three-judge panel of the 4th U.S. Circuit Court of Appeals dismissed the Virginia case in July, ruling that the tax breaks were valid. The same day, a three-judge panel of the D.C. Circuit Court of Appeals concluded 2-to-1 that the subsidies are unconstitutional.

The uncertainty in the aforementioned examples stems from the fact that “more than 4.5 million consumers in three dozen states that utilise the federal exchanges get subsidies under the legislation,” according to U.S. News. The D.C. court, however, held that the text of the statute ‘does not permit the Internal Revenue Service to issue tax credits for insurance bought on federal exchanges.’ Meanwhile, the Virginia court determined that “the pertinent legislative wording is unclear and vulnerable to numerous interpretations,” allowing the Internal Revenue Service to provide subsidies to anyone participating in federal exchanges.

The section of the statute that establishes the method for calculating the subsidies assumes that insurance would be acquired “through a state-established exchange.” However, the bill also said that if a state refused to host an exchange, the federal government would step in. Aside from the 14 states and the District of Columbia that have established their own exchanges, 4.7 million individuals who have signed up for subsidised health care via HealthCare.gov may be impacted.

Let’s go right to the point: what does this imply for the small company owner?

It may not signify anything to certain people. The American Society of Employers (ASE) and Priority Health discovered in a Michigan poll earlier this year that 98 percent of firms questioned provided a coverage option for the 2014 plan year, with just slightly less (82 percent) planning to offer coverage in 2015. Given that health benefits come at a significant cost to businesses, why are so many still prepared to bear this burden? There are various causes for this: To begin with, over 70% of those polled indicated that providing health insurance was a crucial element in recruiting and maintaining a bright staff. Second, a productive employee who misses less work reduces the employer’s total expenditures.

And Michigan is hardly the only state that has abandoned public health care. “In California, for example, just 12,000 people joined in the state’s small-business exchange, compared to over a million who signed as individuals.” “To yet, few employers have taken advantage of the tax credits available for buying coverage for low-wage employees,” the New York Times’ Reed Abelson said.

Others believe that tax breaks are what make health care inexpensive. According to the ACA, it “may cover up to 35 percent of the premiums a small company spends to cover its employees.” In 2014, the rate will rise to 50%… According to the Congressional Budget Office, the tax credit will save small companies $40 billion by 2019… According to the Council of Economic Advisors, 4 million small firms are eligible for the credit provided they offer health coverage to their employees. Qualifying enterprises must have less than 25 full-time employees (e.g., fewer than 50 half-time employees), pay average annual earnings of less than $50,000, and cover at least 50% of the cost of health care coverage for their employees.”

As the debate rages on, small company owners must examine their budgets and employee requirements to determine whether to provide health insurance as part of a perk package or skip the expenditure for a possible individual government plan