The Obama Administration has given a year or more reprieve to businesses with 50 or more workers from hefty new fines if they don’t provide affordable health insurance starting in 2014 due to health reform. The penalty is $2,000 per employee.
It hasn’t been a great couple of months for health reform (for more headlines across the country, see bottom).
Now, businesses don’t have to pay that penalty, called the employer mandate tax, until 2015 or beyond if they don’t provide affordable coverage. The small business lobby won the reprieve because they argued health reform would cost 1.6 million jobs due to the new fine, extra paperwork and problems with the law.
But individuals still have to pay a mandate tax if they don’t have affordable coverage come January 1. Having fewer companies offering affordable coverage January 1 could mean more individuals would have to pay the mandate tax, or pay for more costly coverage.
You guessed it, the government defines what’s affordable coverage—the IRS is the lead agency asking you, your household and your employer about coverage versus your wages here, to determine if you owe the mandate tax. The Taxpayer Advocate has already warned Americans must now give the IRS under health reform details about their insurance plans, who is covered, the dates of coverage, insurance costs, and employer coverage. Plus, the IRS gets to share that information with state exchanges, employers, insurance companies, and others.
Taxpayers will also have to pay more to fund the state health exchanges if employers drop workers from their insurance during this one year plus reprieve, potentially sending employees towards the state health exchanges. To be sure, dozens of states haven’t launched exchanges yet, but the federal government is stepping in to launch exchanges for them. Either way, taxpayer costs rise.
In all, it’s not been a good time for health reform lately. FOX News analyst Mark Rigby picked up these headlines across the country:
U.S. to delay key health-reform provision to 2015
Reuters, July 2
Coverage may be unaffordable for low-wage workers
Associated Press, June 13
Employers Eye Bare-Bones Health Plans Under New Law
The Wall Street Journal, May 19
Half of U.S. Small Businesses Think Health Law Bad for Them
Gallup, May 10
Part-timers to lose pay amid health act's new math
Los Angeles Times, May 2
Botched ObamaCare rollout tops Democratic fears for 2014 election
The Hill, May 1
Baucus warns of 'huge train wreck' enacting ObamaCare provisions
The Hill, April 17
Time magazine, April 2
Small Firms’ Offer of Plan Choices Under Health Law Delayed
The New York Times, April 1
Kathleen Sebelius: ObamaCare Implementation May Cause Some Health Care Costs To Rise
Reuters, March 26
Study: Health overhaul to raise claims cost 32 pct
Associated Press, March 26, 2013
Senate backs symbolic repeal of medical device tax
Reuters, March 22
Beige Book Says ObamaCare Is Costing Jobs and Sales
Investor’s Business Daily, March 6
Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.