The Associated Press reports this morning that a “wrinkle” in the soon-to-be-fully implemented ObamaCare law may make employer-based health care coverage for low-wage workers unaffordable:
t’s called the Affordable Care Act, but President Obama’s health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels.
That might seem strange since the law requires medium-sized and large employers to offer “affordable” coverage or face fines.
But what’s reasonable? Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it’s like a mirage — attractive but out of reach.
The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.
Many are expected to remain uninsured, possibly risking fines. That’s due to another provision: the law says workers with an offer of “affordable” workplace coverage aren’t entitled to new tax credits for private insurance, which could be a better deal for those on the lower rungs of the middle class.
The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee’s income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)
But do the math from the worker’s side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 and the insurance would still be considered affordable.
Even a premium of $1,000 — close to the current average for employee-only coverage — could be unaffordable for someone stretching earnings in the low $20,000’s.
Keep in mind here that many would assume that employers would deliberately offer expensive coverage options in order to meet their obligations under the Unaffordable Healthcare Act, but in reality most wouldn’t – they know offering affordable coverage to workers is a benefit that would keep them competitive in the work marketplace, helping bring in new employees while keeping existing ones happy. Also note that some employers may not have any option other than to offer expensive health insurance plans with the more “economical plans” being affordable but with high deductibles to meet, simply due to the rising cost of health insurance in general. I’ve talked to many people offline and online who have already seen their health insurance costs rise and deductibles go up as a result of employers preparing for ObamaCare. For example, pre-ObamaCare, yours truly was on what some would call a “luxury” plan – single coverage paying around $40 a month, including prescriptions and dental. No deductible for health or dental or prescription. Since ObamaCare, I’m paying the same amount per month but now have a high deductible to meet for health and a small one to meet for prescriptions … because that’s what I could afford. Had I stayed on that “luxury” plan, I’d have been shelling out close to $300 a month. No can do.
Too bad we don’t work for Congress where at least one Democrat Congressman is calling for an “amicus brief” to be filed on behalf of federal workers because their rise in premiums are “unfair”, or are friends of Obama, where we could be in line for an waiver, however temporary….