ObamaCare’s Mandates Are Harming Small Business | Health Policy Blog | NCPA.org

The Mandate on Employers. Though most of the media attention has focused on the number of individuals who have lost health coverage and the rocky start of the federal and state health exchanges, much of the burden of complying with the ACA will actually fall on employers. About six-in-ten Americans with private health coverage get it through an employer. The cost is not trivial: The Congressional Budget Office estimates that the required coverage for an individual will cost the equivalent of an additional $3 an hour “minimum health wage.” Family coverage could cost more than twice that amount.Employers are also required to limit the amount of premiums most employees pay to a percentage of their wage income. For example, health plans are considered “unaffordable” if workers earning less than 400 percent of the federal poverty level about $46,680 for an individual must pay a premium that is more than 9.5 percent of their income. Firms that fail to provide health insurance will be subject to a tax penalty of $2,000 for each uninsured employee beyond the first 30.  Firms that offer “unaffordable” coverage will pay a penalty of $3,000 for each worker who cannot afford coverage.In theory, firms could retain their current health plan by claiming “grandfathered” status. However, according to official documents, two-thirds to as many as 80 percent of employer plans will likely lose their grandfathered status — forfeiting protection from cost-increasing regulations.Effect of ObamaCare on Premiums. The consequences for employers and individual workers who must purchase coverage are already becoming apparent. A 2014 survey of 148 insurance brokers by the investment firm Morgan Stanley found that renewal rates in the small group market have risen substantially. For instance:Premiums for firms renewing in 2014 jumped 11 percent in the small group market.For firms with coverage through BlueCross, the year-over-year renewing contract premium hike is nearly 16 percent.For individuals, the increase was similar — about 12 percent.

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