…until the Obamacare individual insurance marketplaces open for enrollment.

Businesses with over 50 employees may be subject to two penalties under the employer mandate; one strong and one weak.  The ultimate smack-down penalty is a $2,000 fine per-worker for every worker after the 30th employee if an employer does not provide any health benefits.  Meanwhile, the slap-on-the-wrist penalty occurs when an employer does offer coverage, but the firm either does not cover 60% of the employee’s costs or requires the employee to pay a contribution that exceeds 9.5% of his income.  In these situations, an employer is fined $3,000 per worker, but only for those who choose to purchase subsidized private coverage on the health insurance marketplace.

In the world of Obamacare, assumptions again backfire and another loophole exists.  Currently, a trend is emerging among large businesses with high turnover of minimum wage employees.  These businesses, primarily retail and restaurant chains, can now avoid the heavy employer penalty and even possibly not have to face the weak penalty.  The solution: “skinny plans.”  

Under skinny plans, premiums range from $40 to $100 per month, while the only services included are a limited number of primary care visits, preventative services, and generic prescription drugs.

Read my latest newsletter to find out “the skinny” on why large employers opt to offer this coverage and how they avoid government backlash.