ObamaCare: What’s in Stock For The Taxpayer? (Part Three)

By Dr. Peter Ikre
In less than two-and-a-half months, the 2nd Open Enrollment Period (OEP) kicks off on the 15th of November, 2014 for another round of marketplace-based registration of the remaining uninsured population. Although the exercise is particularly relevant to those without health insurance, it offers another opportunity for those wishing to make adjustments to existing health insurance policies. As part of efforts to update and prepare health care professionals including assisters such as navigators/certified application counselors toward the forthcoming 2015 open enrollment period, the Centers for Medicare and Medicaid Services (CMS) organized a day-long workshop at the Renaissance Woodbridge Hotel in Iselin this past July. Participants were inundated with numerous materials and information concerning ongoing efforts to expand health coverage to uninsured individuals.
I will share with you materials from the event as we continue the series on the Affordable Care Act (ACA), otherwise known as Obamacare. Apart from highlights from the workshop, I’ll provide a progress report on the 2014 OEP and delve a bit into the business side of the health care reform law especially as it relates to small businesowners and those aspiring to join the ranks of the self-employed. Despite concerns in some quarters about the viability of Obamacare, latest figures from the first open enrollment period provide some succor as to the direction of the program in general. While reviewing data from the just concluded enrollment exercise, Blumenthal and Collins (2014) observed that significant progress was made toward efforts aimed at extending health care coverage to high risk groups in the uninsured population such as children and young adults. According to a survey conducted by the Commonwealth fund, 7.8 million adults within the 19 to 25 age category obtained health insurance as a result of the ACA provision permitting children to remain on health plans of their parents till age 26. So far, the overall effect of this mandate is a reduction of 1 million to 3 million in the number of young adults lacking health insurance since the inception of Obamacare (p. 276). In another development, based on available data, it is estimated that 80% to 90% of enrollees have paid their first month’s premiums while 85% of the people who selected a plan during the last enrollment exercise were eligible for subsidies to use toward payment of premiums. Furthermore, Blumenthal and Collins (2014) reiterated various ways the public particularly the uninsured can purchase health insurance under Obamacare including the following: a) federal and state-based marketplaces, b) directly from insurance companies, c) Medicaid eligibility, d) enrollment in parents’ health plans till age 26, and e) through the small business marketplace and employer-based health programs. Moreover, Blumenthal and Collins (2014) reminded the general public that health insurance may be purchased at four major levels of actuarial value represented by the platinum, gold, silver, and bronze plans. The preceding plans cover 90%, 80%, 70%, and 60% respectively of medical expenses borne by those insured under the new arrangement (p.276). I promised earlier to share a few things I garnered from the CMS workshop. It is noteworthy that organizers of the event stressed on the need for increased participation of individuals
from immigrant/minority communities. They used the occasion to correct some misconceptions about the impact of Obamacare enrollment on one’s chances of getting a green card or becoming a U.S. citizen. Citing from reports emanating from the United States Citizenship and Immigration. Services, organizers categorically stated that your chances of getting a green card will not be impacted if you, your children, or other family member access the health care delivery system through Medicaid, NJ FamilyCare, WIC, prenatal care, other free or low cost medical care. Nonetheless, they cautioned that one might experience some difficulties getting a green card later only if Medicaid or other government funds were used to pay nursing home or other long term care services. Furthermore, you cannot lose your green card if you, your children, or other family members obtain health care through Medicaid or NJ FamilyCare, food programs, other non-cash programs, cash welfare, and long-term care. It is pertinent to clarify the myths surrounding applications for health insurance and the effect on one’s immigration status. The falsehoods serve as potential barriers to active involvement of many individuals in the immigrant/minority populations.
Before concluding this aspect of the series, I want to make a few comments about the Affordable Care Act and the role of small business in ensuring success of the program. Accordingto Lowry and Gravelle
(2014), requirements of health care law related to businesses promote provision of health care to employees via employer-based health insurance plans. To this end, Obamacare offers a tax credit to companies to improve affordability of health care. It is equally important to emphasize that approximately 96.2% of firms will not be impacted by penalties for non-compliance owing to the fact that they employ fewer than 50 full time employers (FTE).
Nevertheless, failure to provide insurance coverage for firms with 50 or more FTE results in monetary fines with average penalty per employee increasing to a maximum of $2000. For instance, the fine for non-compliance for a firm with 50 FTE workers is an average of $800 per employee.
Likewise, companies with 55 and 60 FTE will be fined $909/employee and $1000/employee respectively. In concluding, it is important that young folks continue with the momentum established during the last open enrollment period. Blumenthal and Collins (2014) warned that insurance premiums could escalate if youth participation rate in the ACA falls short of expectations in the 2015 enrollment period. In a similar vein, the Kaiser Family Foundation expects a modest increase in premiums in 2015 by 1% to 2% to counter increasing costs even with an insurance pool slightly tilted in the direction of older people. Finally, Lowry and Gravelle (2014) advised businesses to avail themselves of Obamacare tax credits to ease premium payments for employee health insurance coverage. To be eligible, employers must pay at least 50% of the health plan premium.
Moreover, credits can be carried backward one year and forward for 20 years.
References
Blumenthal, D., & Collins, S.R. (2014). Health care coverage under the Affordable Care Act- A progress report. The New England Journal of Medicine, 371(3), 275-281. doi:10.1056/nejmhpr140566 Lowry, S., & Gravelle, J. G. (2014). The Affordable Care Act and small business: Economic issues. Congressional Research Service. Retrieved from http://www.fas.org/sgp/crs/misc/r43181.pdf
Dr. Peter Ikre has more than 25 years experience in Healthcare, Accounting, Taxation, Business Management and Financial Consulting both locally and internationally. Dr. Ikre is currently a financial & tax expert and loan modification specialist at Investigroup, Inc. You can reach him at 9083421160 (cell); 9083441806 (alt.); 9086884778 – office; email: pikre@investigroup.org

Posted by admin on Sep 16 2014. Filed under Community News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry