The Affordable Care Act is as much about the tax office as the waiting room.
A system of exemptions and tax credits is in place to make coverage under the law more attractive, while annual penalties that will increase over time promise to cut into the pockets of insurance holdouts.
In part, the ACA aims to encourage small businesses to insure their workers, so a seminar earlier this month in Smithfield sought to help businesses determine if coverage for their employees was worth the cost.
Chandler Pernell, who runs a heating and cooling company in Smithfield, said he opted for private insurance when he and his wife decided to have a baby. Pernell said he likely paid twice as much as he would have for an ACA policy, but he said he was paying for peace of mind.
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“On paper. it costs more, probably double, but I knew we would be covered,” Pernell said.
In particular, Pernell said he was mindful of rumors that the cheapest Blue Cross Blue Shield plan through ACA was hard to use in Johnston County. “I can’t call 15 grown men into my office and tell them to get this when I don’t have it and I don’t want it,” he said, referring to his employees.
Smithfield’s seminar attracted a mix of people – from hotel managers to social workers to accountants. Some, interested in offering coverage for their employees, cam looking for answers to questions. Others were studying up for clients.
Businesses with 24 or fewer full-time workers can receive tax credits equal to 50 percent of the premiums they pay for their employees. That’s because the cost of insuring so few people is high. Businesses with 25 to 50 workers can buy insurance through the ACA marketplace but aren’t eligible for tax credits. The good news is that those businesses will likely pay lower premiums than the smallest of businesses.
Sylvia Alonzo of CommWell Health conducted the seminar, running through a few scenarios and answering questions about tax credits and exemptions. She said a 10-employee business kicking in $70,000 for health insurance premiums would see a tax credit of $35,000.
Alonzo advised those considering health-care coverage for their workers to make sure the plan they choose is widely accepted locally. In North Carolina, Aetna, UnitedHealthcare and Blue Cross Blue Shield offer ACA plans, with UnitedHealthcare the most widely accepted in the area.
“You want to be sure you’re getting something you can actually use,” Alonzo said.
The one truth of the health-care law is that everyone is required to have insurance. In the year ahead, those who don’t buy insurance for themselves, or don’t have coverage through their work, face penalties of $695 per person or 2.5 percent of one’s salary, whichever is greater. Those penalties are up from $325 and 2 percent this year.
Under ACA, companies with 50 or more employees must offer full-time workers health insurance. The law then offers coverage to everyone else, from part-time workers to the self-employed and unemployed.
The prices individuals and businesses pay can vary greatly, depending on coverage and circumstance. Individuals making between $11,770 and $47,080 annually qualify for lower monthly premiums. Those making more than $47,080 have to pay full price, while those making less than $11,700 are exempt from penalties but aren’t eligible for subsidies because North Carolina voted against expanding Medicaid.
Drew Jackson: 919-553-7234, Ext. 104; @jdrewjackson