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10 realities for businessescomment (0)

July 18, 2013

Business realities resulting from health care reform:

1. The Affordable Care Act is forcing businesses to make difficult decisions about staffing and benefit packages.

2. They recently announced employer mandate delay is positive in that it gives businesses more time to do the necessary research to make the decisions they need to make.

3. The employer mandate delay could be a negative, however. If an employer delays providing coverage until 2015, its workers could sign up for coverage on the new exchange and be eligible for tax credits or subsidies, which would go away when/if the employer offers a qualifying plan in 2015. This would cause the employee to pay more overall.

4. Unintended consequences could take place — large employers might drop coverage so their employees will be eligible for subsidies, and group health benefits might become less beneficial for many employees. 

5. Not everything is being postponed. The 3.8 percent surtax on 2013 investment income and the 0.09 percent payroll tax increase are both on schedule for Jan. 1, 2014. Notifications requirements about the exchanges, changes to COBRA notices and wellness incentive rules also are still on schedule.

6. Insurance premium hikes are likely not going to hold off until 2015.

7. Young, healthy people with average or better incomes might choose not to carry insurance because their premiums will likely be higher to help offset insurance premiums for those with lower income and the penalty for not carrying insurance is low.

8. Taxes could increase because the income anticipated coming from the employer mandate penalties is now delayed until 2015. The penalty money was slated to help fund the subsidies given out to buyers unable to afford coverage entirely on their own.

9. There will be more paperwork involved.

10. More delays could be coming, especially with the infrastructure needed to manage the health exchanges.

Source: These 10 realities were taken from a July 12 article written by the Birmingham Business Journal staff on www.bizjournals.com.

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