Tuesday, July 17, 2012

Affordable Care in Dryden

Paul came home with questions about a small business in Dryden and the Affordable Care Act. Here are the answers.

Because the business has fewer than 50 employees, it is exempt from employer responsibility for offering insurance. However, since it has fewer than 25 full-time employees and offers wages that average under $50,000, it could provide employee health insurance, pay at least 50% of premiums, and receive a tax credit of up to 35%, increasing in 2014 to 50%. It will also be eligible in 2014 to shop at the Affordable Insurance Exchange to receive more choices and lower prices—similar to the buying power that large businesses currently have. If the employees it is insuring feel the cost is too high, they can take the employer contribution in cash and apply it to their own chosen health insurance plan from the Exchange.

Because it is so small, the Dryden business may decide to continue without offering insurance. Employees will be able to buy insurance directly on the Exchange, starting in 2014. If they make under $14,000 (or $29,000 for a family of four), they will be eligible for Medicaid. If they make under $43,000 (or $88,000 for a family of four), they will receive a tax credit that is advanceable (to lower monthly premiums). They may also qualify for cost-sharing of payments and deductibles. If they choose not to purchase insurance, they will pay a fee (now considered a tax), which will go to help pay medical bills for other uninsured Americans, a fee that every taxpayer in the nation currently helps to pay.

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