The Affordable Care Act (Obamacare) is getting closer to full implementation. We’ve seen various steps to implementation of the law since its passage but some pretty big changes are scheduled for January of 2014. When folks recover from their New Year’s excess they’ll be facing a very different world when it comes to the delivery of health care and health insurance.
One of the changes we’ll see is the penalty on large companies (those with over 50 employees) who don’t provide health insurance. This particular tax was meant to encourage employers to offer health plans of some sort. But it just may be that many of the employers will simply pay the (perhaps less expensive) penalty rather than provide coverage and some firms that currently offer health coverage may drop it in favor of the penalty. The devil will be the particular numbers for particular companies in addition to the commitment those companies have toward providing health insurance as a benefit.
The good news is that everyone will have the ability to purchase individual plans from the new Health Insurance Exchanges that are being established by the states. This guaranteed issue coverage will potentially allow greater flexibility for members of the work force who will benefit from the opportunity to purchase a wider variety of health care plans as well as provide new freedoms for workers to change jobs or start their own businesses free from the worry of losing an important (and irreplaceable for those with pre-existing conditions) health insurance plan.
Michael Kitces has written an excellent article that treats the details of this new employer penalty/tax here.