http://www.vansblog.net The new healthcare law has left all employers looking for ways to comply. Offering a self-insured plan does offer employers a broader array of solutions. The example given in the May 20, 2013 Wall Street Journal article, Employers Eye Bare-Bones Health Plans Under New Law uses extreme examples of the strategy. But there are some industries that have to take that route to remain profitable. Employers that have low income employees are still doing a service to their employees by offering some sort of plan. Something is better than nothing. But it puts the healthcare system back in the same predicament as they are in now; low income workers go to public hospitals for free care. However, there are two points where the article communicates the wrong conclusion. First if an employee has credible healthcare available from their employer they will not qualify for insurance through the Exchange. If their employer offers coverage, there are only two ways for the employee to qualify for coverage from the Exchange. First, is if premium of the employer’s plan is 9.5% or greater than the employee’s income. The language in the law could be a loophole for the Exchanges if the government chooses to exploit it. The regulation reads as 9.5% of household income. If the government wants to prevent the exchanges from imploding by only covering sick people, they could enforce this language. The other way to be denied Exchange coverage is if the employer’s share of the coverage is greater than 60%. If coverage is less than 60% then the employee would qualify for the Exchange.
The second point that the article does not communicate correctly is in the Kaiser example. It states that the $9 an hour worker would have to pay as much as $90 per month for a midlevel plan. If the employee picked the low level exchange plan, that might meet the affordability requirement. The Affordable Care Act states that the employer can avoid penalties by offering employee only coverage that meets the two criteria, employee only coverage is less than 9.5% of household income and the employers share of the coverage is greater than 60%. If the employee chooses not to take the coverage then the employer does not pay the penalty.