The Patient Protection and Affordable Care Act, also known as Obamacare, was signed into law in 2010. It was upheld by the Supreme Court in June 2012. However, the mandates of Obamacare might have a negative effect not only on the health insurance industry but also on our employment situation.
First, how can it affect your job or your health insurance coverage?
Under the health care reform law, employers with 50 or more employees should provide affordable health care coverage to their full time employees by 2014. Not meeting this requirement would mean paying a “per employee” penalty. Large employers could face an annual penalty fee of approximately $2,000 to $3,000 per employee.
This mandate will make it hard for employers with 50 or more employees compared to those with less than 50 workers. Small businesses with 50 employees or less are exempted from the penalties. They can even get tax credits toward their health insurance costs.
You might be wondering why only small employers will be given tax credits. Based on a recent survey conducted by the Kaiser Family Foundation, only 49 percent of employers with three to nine employees offer employer-sponsored health care coverage compared to the 95 percent of large employers with more than 50 employees. If tax credits are provided, small employers will be motivated to provide health insurance policies to their employees.
In an attempt to escape the penalty, some employers have started to switch their full-time employees to a part-time status. Employers are not required by the law to provide health care benefits to part-time workers. Because of this, your health insurance coverage will also be placed at risk. A lot of employers are now considering this option to cut their health care costs. Either way, Obamacare could affect your job or health insurance.