Obamacare Penalty May Not Be High Enough For Middle Incomes

Even though penalties under the Affordable Care Act for not having health insurance jumped significantly this year, they still might be too low to attract Americans to signup for subsidized coverage, a new analysis shows.

Avalere Health, a Washington health policy and consulting firm, said some middle income healthy individuals would rather pay the fine when they weigh it against spending a few hundred dollars more on insurance.

The fee increased to $325 per adult or 2% of income for 2015,according to healthcare.gov. That compares to a fee of $95 per adult or 1 percent of income for those who went without coverage last year.

“Individuals earning more than double the poverty level may continue to forego coverage since paying the fine is still much more affordable than purchasing insurance,” Caroline Pearson, senior vice president at Avalere, told journalists during a panel discussion Friday on exchanges at the Association of Health Care Journalists annual meeting in Santa Clara.

Via: Forbes

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Obamacare Ads Steer Clear From Discussing Penalties

The state and federal health insurance exchanges created under Obamacare are touting the benefits of coverage but largely steering clear of discussing the penalty for not signing up. 

The avoidance of penalty talk is by design rather than default, reports The New York Times, noting that operators say market research has showed that consumers are more likely to respond to positive messages than to the threat of punishment.

"We feel that the carrot is better than the stick," Larry Hicks, a spokesman for Covered California,  told the newspaper. "This is a new endeavor. We want people to come in and test our wares."

Officials at Enroll America, a nonprofit agency promoting the new exchanges, agreed. 

Sophie Stern, a senior policy analyst for the agency, told the Times, "That doesn't mean that the penalty or the mandate isn't an important piece of the law from a policy perspective. But from a messaging perspective, this is what we find resonates best."

But there is another side to downplaying the penalty: The so-called tax is difficult to enforce. As Forbes contributor Roberton Williams explained,  "If you owe a penalty, you're supposed to pay it with your income tax return. But there's not much the IRS can do if you don't pay. They can't put you in jail or garnish your wages. In fact, about the only way the IRS can collect is if you're due a refund. They can deduct the penalty from this year's and future refunds."

"It might be that they want to be positive," Michael Cannon, director of health policy studies at the Cato Institute, said to the Times, referring to exchange operators. "But it's also the case that an informed customer is not their best customer."

There is also the question of whether it would cost more to buy insurance than to pay the penalty, which in 2014 is $95 per adult, or 1 percent of their income, and half that for children under 18. 

Via: Newsmax
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Business Owners May Face $100-Per-Day Penalty Under ObamaCare

Small business owners who thought they were off the hook for ObamaCare regulations until 2015 may be in for an expensive wake-up call next month.

Beginning Oct. 1, any business with at least one employee and $500,000 in annual revenue must notify all employees by letter about the Affordable Care Act’s health-care exchanges, or face up to a $100-per-day fine. The requirement applies to any business regulated under the Fair Labor Standards Act, regardless of size. Going forward, letters are to be distributed to any new hires within 14 days of their starting date, according to the Department of Labor.

Earlier this summer, the employer mandate, which states that every business with at least 50 or more full-time employees must offer workers acceptable coverage or face a $2,000 penalty per-worker, per-year, was pushed back until 2015. But the Oct. 1 employee-notification deadline stands. Keith McMurdy, partner at FOX Rothschild LLP, says the $100 per-day fine has been “unfortunately overlooked” by many small businesses, and the dollar amount on the penalty comes from the general per-day penalty under the ACA.

“The PPACA has a general $100-a-day penalty for non-compliance. Since this requirement is in the FLSA there are also penalties there. So the general consensus is that some penalty applies and probably the general provision,” McMurdy tells FOXBusiness.com.

Joeseph Dutra, president and CEO of Kimmie Candy Co., has 30 employees and brings in more than $500,000 in revenue annually, which means he has to notify workers of the exchanges by Oct. 1. He had no idea.

Via: Fox Business

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5 Effects Obamacare Will Have on Working Americans

Obamacare will certainly have a negative impact on every American, but here are five ways it will harm working Americans:

1. Two-thirds of American employees’ wages will decrease as employers deal with increasing costs. Heritage’s Drew Gonshorowski explains the results of an Urban Institute study: “The Urban Institute claims that mid-size firms will see spending per person increase by 4.6 percent, while large firms will see spending increases by 0.3 percent per person. According to the U.S. Census, this accounts for 65.1 percent of employees—or roughly 79 million—in the U.S. who are employed by medium- or large-size firms. The study suggests: ‘Any increase in employers’ health-related costs will be offset by decreases in other compensation—whether wages or other benefits.’ This means that individuals in mid- and large-size firms will receive less in take-home wages (or other benefits) and pay a greater proportion of their compensation to health care due to Obamacare.”
2. Loss of existing insurance coverage. Because of Obamacare’s high costs, experts predict that employers will stop offering employees health coverage, forcing employees into the new government-run exchanges. Although estimates vary, it is likely that millions of Americans will lose their current coverage. For instance, the non-partisanCongressional Budget Office estimates that between 5 million and 20 million Americans will lose employer-sponsored coverage, the American Action Forum estimates 35 million, and McKinsey, a consulting firm, estimates that 30 percent of employers will definitely or probably stop offering coverage after Obamacare takes full effect in 2014.
3. Premiums in the individual market are set to skyrocket. Obamacare’s new, extreme insurance rules and regulations will have dire effects on the cost of coverage that individuals and small businesses purchase on their own. As Forbes columnist and health policy analyst Avik Roy has pointed out in recent articles, “Obama adviser Jonathan Gruber has estimated that, by 2016, the cost of individual-market health insurance under Obamacare, relative to what it would have been under prior law, will increase by an average of 19 percent in Colorado, 29 percent in Minnesota, and 30 percent in Wisconsin. A prestigious actuarial firm, Milliman, has estimated that individual-market premiums in Ohio could increase by 55 to 85 percent.”
4. Full-time workers turned part-time to avoid the employer mandate. As Heritage predicted, businesses have already begun limiting the hours their employees can work, turning full-time workers into part-time workers, to avoid paying the employer mandate penalty or providing costly insurance coverage. For example, one of the nation’s 30 largest employers, Darden Restaurants, is experimenting with keeping employees under the 30-hour threshold established for Obamacare’s mandate. According to the Orlando Sentinel, “In an emailed statement, Darden said staffing changes are ‘just one of the many things we are evaluating to help us address the cost implications health care reform will have on our business.’”
5. The heavy burden of 18 taxes and penalties. Obamacare imposes 18 new taxes and penalties that will cost Americans over $836 billion between 2013 and 2022. These taxes will either hit consumers directly or be passed on through higher prices. For example, the infamous individual mandate to purchase health insurance will be imposed on 6 million Americans in 2016, many of whom are the working middle class. Nearly 70 percent of payers will be below 400 percent of the federal poverty level, and even those below the poverty level could be forced to pay the mandate tax.

Obamacare must be repealed in order to protect hard-working Americans from its harmful and far-reaching effects.

Via: The Foundry

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ObamaCare Work Disincentives: 4 Cliffs Hit Employees

In the time of Caesar, all roads led to Rome. In the time of ObamaCare, seemingly every path heads straight for a cliff.

The health law is filled with cliffs where the returns for more work take a nose-dive.

The Congressional Budget Office has estimated ObamaCare will "reduce the amount of labor used in the economy by roughly half a percent" — about 800,000 full-time jobs. It seems likely that four especially steep cliffs — including two where marginal tax rates can approach 100% or more — will factor into work and hiring decisions.

The 50th employee: For companies with 49 workers that do not offer its employees health coverage, the hiring of just one more worker would carry a penalty of $40,000.

A firm with at least 50 workers that doesn't offer coverage must pay a $2,000 fine per worker (minus the first 30 workers) if even one of its employees receives ObamaCare subsidies.

Likewise, even if a business with 50 employees offers coverage, it would still face up to a $3,000 charge for each worker who nevertheless claims Obama-Care subsidies.

The law gives workers this option when employer coverage is deemed unaffordable because it costs more than 9.5% of the worker's household income.

France has 2.4 times as many firms with 49 employees as with 50 due to labor regulations that take effect with the 50th hire, BusinessWeek has noted.

How many firms will institute a hiring freeze to avoid ObamaCare penalties is unclear, but the risk is that the U.S. will go down a similar path as France.

The low-income cliff: At 200% of the poverty level is a dividing line. Deductibles for married couples on one side may be $300 vs. $3,500 on the other, according to one estimate provided to the Kaiser Family Foundation by Towers Watson.

In addition, a family at 200% of poverty would pay $830 less for subsidized insurance than a family at 225% of poverty, The Kaiser Family Foundation's health subsidy calculator shows.

Via: IBD

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