The 411 on the ACA
It’s pretty safe to assume that Nick Tate, author of the “ObamaCare Survival Guide,” presented to a somewhat skeptical audience. It’s no secret that much of the c-store industry views the upcoming insurance mandates with a wary eye.
And Tate did little to defend it, but he didn’t do much to knock it down a few pegs, either. When asked if he was for or against it, his answer was “both, neither …” And then he spelled out why.
First, he tried to sum up, out of the 11,000 pages of regulations, how the Affordable Care Act—called ObamaCare by many, including the president—will “change the game for businesses and consumers.” The hope is that the law will be responsible for potentially 45 million new insurance customers. It seems far-fetched, considering early numbers indicate far fewer than initially projected are purchasing health-care policies. Regardless, it means changes are afoot for how the c-store industry deals with health care and its related costs. Some details:
▶ Oct. 1 marked the first day consumers could sign up for health insurance in one of four varieties: bronze, silver, gold and platinum.
▶ Consumers can choose their plans from either state-sponsored marketplaces or the slow-to-its-feet, federally run Affordable Healthcare Exchange.
▶ By Jan. 1, all Americans must have insurance or pay a penalty to the IRS.
▶ Insurers will not be able to bar those with pre-existing conditions from having insurance.
▶ In 2015, companies with more than 50 workers will pay a fine to the IRS if they do not offer health-care insurance.
There are benefits for consumers and companies alike, Tate said:
▶ Small companies that employ 25 or fewer workers can use the new exchanges, and they can apply for a tax break if they cover their employees’ health insurance. These companies can qualify for a tax credit of up to 35% of their premiums. In 2014, it will rise to 50% for those that purchase insurance through the new Small Business Health Options Program (SHOP). These programs are estimated by some to help lower annual premiums for businesses by 1% to 4%. (According to Tate, full implementation of the SHOP program has been delayed until 2015.)
▶ Many insured Americans, as well as the companies that insure them, have already received rebate checks under a new set of rules that require insurance companies to spend 80 to 85 cents of every $1 on medical care.
It’s a different, and seemingly more complicated, story for larger companies. There are more rules, more fees and more stipulations. The gist is that if large companies do not offer their employees insurance plans that meet the law’s requirements, they could pay up to $2,000 in fines per worker to the federal government. What was originally set for Jan. 1, 2014, has now been postponed a year by the Obama administration.
One of the new mandates is the quality of plans and whether or not they fit the strict criteria of the law:
▶ The insurer must cover at least 60% of an employee’s medical expenses.
▶ Deductibles are limited to $2,000 for an individual and $4,000 for a family.
▶ Premiums can’t be more than 9.5% of an employee’s total gross income.
▶ A $3,000 fee will be levied against companies that do not offer their workers plans that meet the government’s specifications of affordability and minimum value.