Outrage #1: Apple Pie Economics Rewards Cheap Employers

Companies can beat their competitors by charging less – if they let the government pick up the tab for employee health insurance. 

Solution: Big Companies have to provide health insurance (a/k/a “Pay or Play”): Beginning in 2014, companies with 50 full time employees must either (1) provide “eligible” employees with “minimum essential” health plan coverage or (2) pay a penalty if an eligible employee gets insurance through a state exchange and qualifies for government subsidized benefits. The penalty is $2,000 per year, for each employee after the first 30.

Solution: The insurance provided can’t be crap. Employers also have to offer plans for which they pay 60% or more of the cost and that is not unaffordable or (2) pay a penalty if an eligible employee gets insurance through a state exchange and qualifies for government subsidized benefits “Unaffordable” will be a sliding scale based on the employee’s income and the percentage of costs covered by the employer. This penalty is $3,000 per year for every employee who gets government subsidized coverage up to the penalty amount the employer would pay if it offered no coverage at all.

Solution: And they have to provide vouchers in case the insurance isn’t that great. Every employer of every size who provides health coverage must provide vouchers to employees who qualify for government subsidized health coverage. The vouchers can be used to pay costs of coverage under an exchange plan. The voucher will probably offset penalties for inadequate coverage.

[box type=”info” border=”full” icon=”♣”]♣ Rules that apply only to new plans. Some mandates only apply to plans that are not grandfathered in, because it was in effect, and unchanged, since March 23, 2010. This symbol indicates a rule that does not apply to grandfathered plans. [/box]