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July 19, 2015
Healthcare Reform to Lower Insurance Premiums
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Everyone Will be Required to Have Health Insurance

Beginning in 2014, everyone will be required to have health insurance, either through a government-sponsored plan, their employer or by purchasing it individually.

1. UPDATE: the PPACA Individual Mandate Was Upheld by Supreme Court

On June 28, 2012, the U.S. Supreme Court issued a 5-4 decision ruling that the mandate for every American to have health insurance was constitutional. This means that beginning in 2014, everyone will be required to have health insurance, either through a government-sponsored plan, their employer or by purchasing it individually. Those who choose not to carry insurance will have to pay a penalty or a tax, (what to call it is still being debated), of $95 or 1% of your income, whichever is greater. If in 2016 you still don’t have insurance, the amount increases to $695 per adult and $347 per child, up to $2,085 per family or 2.5% of your income, whichever is greater.

2. Tax Credits for Small Employers

Employers with fewer than 25 employees and average annual wages of less than $50,000 may claim a tax credit for the cost of providing insurance which begain with 2011 tax returns.

3. Dependent Coverage

Health plans that cover dependents now have to cover dependents on a parent’s plan until their 26th birthday regardless of their student status. This applies both to new and existing plans.

4. W-2 Reporting

Businesses with 250 employees or more in 2011 must begin to report on 2012 W-2s (issued Jan. 2013), the aggregate value of health benefits provided to each employee including medical, dental and vision coverage. Employers with fewer than 250 employees fall under the requirement beginning with W-2s issued Jan. 2014.

5. Health Care Premium Use

For small employers and individual health insurance plans, at least 80% of all premium dollars collected are spent on health care services and health care quality improvement. (85% for large group plans).

6. Requirement to Inform Employees

Beginning in 2013, employers must provide each employee with written information on the employer health plan, health exchanges, available subsidies for insurance and guidelines about how to purchase insurance.

7. Simple Cafeteria Safe Harbor

Beginning 2011, simple cafeteria plans for small businesses include a safe harbor from nondiscrimination requirements if the employer averaged 100 or fewer employees during either of the 2 years preceding 2011.

8. Employer Play or Pay

Beginning in 2014, employers with more than 50 employees will pay a per-employee penalty fee if they do not offer health coverage or if they offer coverage and at least one full-time employee receives a premium subsidy.

9. Tax on “Cadillac” Plans

Beginning in 2018, there will be an excise tax on any “excess benefit” of employer-sponsored coverage. This is currently defined as more than $10,200 for individual coverage or more than $27,500 for family coverage.

10. Automatic Enrollment

Employers with more than 200 employees must enroll employees in a company sponsored plan.

Beginning in 2014, everyone will be required to have health insurance, either through a government-sponsored plan, their employer or by purchasing it individually.

1. UPDATE: the PPACA Individual Mandate Was Upheld by Supreme Court

On June 28, 2012, the U.S. Supreme Court issued a 5-4 decision ruling that the mandate for every American to have health insurance was constitutional. This means that beginning in 2014, everyone will be required to have health insurance, either through a government-sponsored plan, their employer or by purchasing it individually. Those who choose not to carry insurance will have to pay a penalty or a tax, (what to call it is still being debated), of $95 or 1% of your income, whichever is greater. If in 2016 you still don’t have insurance, the amount increases to $695 per adult and $347 per child, up to $2,085 per family or 2.5% of your income, whichever is greater.

2. Tax Credits for Small Employers

Employers with fewer than 25 employees and average annual wages of less than $50,000 may claim a tax credit for the cost of providing insurance which begain with 2011 tax returns.

3. Dependent Coverage

Health plans that cover dependents now have to cover dependents on a parent’s plan until their 26th birthday regardless of their student status. This applies both to new and existing plans.

4. W-2 Reporting

Businesses with 250 employees or more in 2011 must begin to report on 2012 W-2s (issued Jan. 2013), the aggregate value of health benefits provided to each employee including medical, dental and vision coverage. Employers with fewer than 250 employees fall under the requirement beginning with W-2s issued Jan. 2014.

5. Health Care Premium Use

For small employers and individual health insurance plans, at least 80% of all premium dollars collected are spent on health care services and health care quality improvement. (85% for large group plans).

6. Requirement to Inform Employees

Beginning in 2013, employers must provide each employee with written information on the employer health plan, health exchanges, available subsidies for insurance and guidelines about how to purchase insurance.

7. Simple Cafeteria Safe Harbor

Beginning 2011, simple cafeteria plans for small businesses include a safe harbor from nondiscrimination requirements if the employer averaged 100 or fewer employees during either of the 2 years preceding 2011.

8. Employer Play or Pay

Beginning in 2014, employers with more than 50 employees will pay a per-employee penalty fee if they do not offer health coverage or if they offer coverage and at least one full-time employee receives a premium subsidy.

9. Tax on “Cadillac” Plans

Beginning in 2018, there will be an excise tax on any “excess benefit” of employer-sponsored coverage. This is currently defined as more than $10,200 for individual coverage or more than $27,500 for family coverage.

10. Automatic Enrollment

Employers with more than 200 employees must enroll employees in a company sponsored plan.

Brian Schroeder
Brian Schroeder
Brian J Schroeder – Independent Broker - (925) 513-7778