A recent report released by the Centers for Medicare and Medicaid Services revealed some troubling insight regarding what is considered to be the “Affordable care Act.” The report was released last Friday and reviewed how changes in the underwriting policies of health care providers will affect the cost of premiums. This report was originally planned to be released 90 days after the initial start date of federal exchange as stated by the 2011 Budget Control Act. However, similar to the other delays in Obamacare deliverables, this report was delayed as well.
This report revealed that:
65% of small businesses are expected to see increases in their healthcare premiums
35% of small businesses are expected to have rate reductions
91% of businesses claimed to have seen an increase in per-employee healthcare cost during their recent renewals
The ACA will lead to 2 million fewer jobs by 2024
Unfortunately, this law is dependent on the younger generation of individuals to sign up for health care plans through the exchange. This is due to the fact that the law is meant to be unbiased when providing coverage to people with pre-existing conditions. However, the younger generation and healthy individuals may have to pay more for insurance so that “everyone” can have equal access to healthcare under the law. This means that the younger generation will see rates increase and may steer them away from enrolling in the exchange. The penalty fee may be less than the cost of their medical coverage.
In addition, small businesses will also be affected by the Health Insurance Tax (HIT). Under this tax provision, small businesses are expected to pay almost $360/family that they cover. This tax may lead small businesses to drop coverage for their employees in order to avoid this cost.
If you have any questions about how your business may be affected by the Health Insurance Tax, please feel free to give us a call.