Study: Health law could mean penalties for one in three employers

News outlets covered analyses of health law provisions affecting businesses.

"About one-third of employers subject to major requirements of the new health care law may face tax penalties because they offer health insurance that could be considered unaffordable to some employees, a new study says," The New York Times reports. The survey, of nearly 3,000 employers, by Mercer, "one of the nation's largest employee benefit consulting concerns ... found that one-third of employers had some workers for whom coverage might be 'unaffordable.'" One provision of the law says that if employee premiums that cost more than 9.5% of their household income, "the coverage is deemed unaffordable, and the employer may have to pay a penalty."

To avoid the penalty, employers "could increase their contributions to premiums. They could reduce the workers' share of premiums but recoup the money in other ways — for example, by increasing co-payments or deductibles. They could offer lower-cost health plans, with less generous coverage. Or they could charge lower premiums to workers with lower wages" (Pear, 5/23).

The Hill: Meanwhile, "[a] study by the National Center for Policy Analysis shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions." The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll. The NCPA study finds the reduction in tax relief to be a cost concern for companies looking to hire additional workers, but operate on slim profit margin yet still provide employee health coverage."

"A Treasury spokesperson acknowledged the tax credit is on a sliding scale, but stressed its primary aim is to help struggling companies provide health coverage to workers" (Heflin, 5/23).


http://www.kaiserhealthnews.orgThis article is republished with kind permission from our friends at The Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery of in-depth coverage of health policy developments, debates and discussions. The Daily Health Policy Report is published for Kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. Copyright 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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