by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
Employers with fewer than 50 full time workers do not suffer Obamacare’s employer mandate tax if they do not offer health insurance coverage. However, if a firm chooses to offer coverage, it must be compliant with the law’s standards.
Small employers who have typically offered their workers some type of health care benefit in the past could very well be frustrated by this policy change, since the law’s required coverage package could increase their firms’ bottom lines. If unable to afford federally qualified plans, employers could do one of two things — steer their workers towards subsidized plans on the individual market, or potentially claim a small employer tax credit that offsets the cost of their contributions towards employees’ health insurance premiums.
Come November 15, Obamacare’s Small Business Health Options Program, or SHOP exchange, will supposedly be opening its doors. SHOP was originally scheduled for implementation last year, but this, too, was delayed. Through a SHOP exchange, businesses with up to 50 full time employees can either offer employees one health insurance option or multiple plans within a specified level of coverage (bronze, silver, gold, or platinum health plans.) Commensurate with the law’s health insurance exchanges for individual policyholders, employers with up to 25 workers using SHOP may also qualify for government subsidies.
How enticing are these subsidies?
Read more from my latest Health Care Update here.