How the Affordable Care Act will Impact Ohio Employers

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Erin Hoeflinger, president of Anthem Blue Cross Blue Shield Ohio has called the Affordable Care Act “a mammoth change for Americans”. Most people are still unaware of how exactly the changes will affect them and their quest for affordable Ohio health insurance, but Hoeflinger spoke quite clearly on how it will impact employers, large and small.

Speaking at a crash course she provided in Affordable Care Act for Dayton Area Chamber of Commerce members recently, Hoeflinger commented that healthcare reform is “confusing” and most people now see it as more of a political event. However, she cautioned that employers have to familiarize themselves with the Affordable Care Act provisions that will affect them, such as mandated insurance plans, insurance exchanges and possible penalties.

Important changes large and small businesses should watch out for

Employers will have to pay several other taxes and fees in the coming years. Some of the changes large employers should watch out for:

• Big employers who do not provide minimum coverage, as defined by the federal government, or those who do not provide affordable coverage, stand to pay penalties. If full-time employees are denied coverage, the penalty would be $2,000 times the number of employees in excess of 30. The penalty increases each year by the growth in insurance premiums.

• In 2014, larger employers can opt to offer Ohio health insurance through an Ohio health insurance company that provides coverage at minimum standards; provide some coverage and pay a penalty for not meeting requirements; or forego coverage and pay a penalty.

Health reform is designed to make it easier for small businesses to provide their employees with coverage. Changes small employers should know about:

• Small businesses with fewer than 50 employees are exempt from the penalties that apply to large businesses.

•  If an employer has 25 or fewer employees and average wage up to $50,000, it may be eligible for a health insurance tax credit of up to 35% (up to 25% for non-profits) to offset the cost of their insurance.

• Employer-based plans that provide health insurance to retirees ages 55-64 can now get financial help through the Early Retiree Reinsurance Program. This program is meant to lower the cost of premiums for all employees and reduce employer health costs.

• In 2014, smaller employers can choose to offer their employees insurance through a particular insurer or an exchange market, or not to offer job-based coverage, and allow their employees to buy Ohio individual health insurance on their own.

The Affordable Care Act also stipulates that in 2014, small businesses with generally fewer than 100 employees can shop for health insurance plans in a state-based health exchange where they can benefit from more choices and lower prices. However, Ohio has still not made a decision on whether or not it will set up a state-based health exchange. The main limiting factor is cost – it is expected that the state would have to spend $30 million to $40 million a year to operate the exchange.