Health Care Reform and Employer Coverage

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Health Care reform and Employer Coverage

You get health benefits through work—so healthcare reform doesn’t affect you, right?

Not quite. The Affordable Care Act affects how most Americans get healthcare.

First, the new law changes the services included in your medical plan. Preventive care like annual check-ups and immunizations are now covered, with some exemptions for grandfathered plans. Children can stay on a parent’s plan until age 26. Plans must now cover at least 60% of annual medical expenses to meet the standards of the affordable care act. There is no longer a yearly cap on how much your plan pays for your essential healthcare benefits, and you can’t be dropped or turned down because of age or illness.

Second, the law requires that employer plans are affordable. For many of us, this means premiums or self coverage will not be more than about 9.5% of annual income from your employer.

So, your plan will include more services and must be affordable. This is all good news, right?

Well, it’s not that simple.

Because plans must include these additional services and keep costs low, companies may make changes to employee plans. These could include higher deductibles, smaller doctor networks, or higher co-payments.

There’s been much talk about companies dropping medical coverage altogether. Here’s what we know: Beginning in 2015, certain large employers will be required to offer healthcare coverage that complies with the law, or they may pay a penalty. Smaller companies will face no penalty at all. It’s hard to say which employers will choose to drop coverage, but many companies choose to offer health coverage because it helps attract and retain good employees.

So is coverage through your job still a good deal? It depends on the cost of your plan and the portion paid by your employer. Your employer can help you determine this. A visit to your state or the Federal health marketplace can help you determine your eligibility for tax credits or subsidies if you bought coverage there instead. Compare carefully. What you pay for work-based coverage could be equal to or less than what you would pay on your own—even with a tax credit.

So remember, even if you have workplace coverage, healthcare reform affects all of us—including you.


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This information is only a high-level summary of certain provisions of the health care law. This information does NOT attempt to summarize all provisions of the health care reform law. This information is not and should NOT be used as legal or tax advice; it should not be used as a basis for decisions regarding how the health care reform law will affect you and/or your business. Should you have any questions on how the health care reform law (including the high level summary of certain provisions of health care reform) will affect you and/or your business, you should seek professional advice from attorneys or other advisors.

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