To Delay Or Not To Delay: A Look At Healthcare Mandates [Part 1]

The White House has been facing quite a bit of criticism for delaying the employer-coverage mandate. A war has been raging between the two political parties; some even find themselves on the opposite side of the argument.

Employer-coverage mandate

As of January 1, 2015, large businesses, defined as 50 full-time-equivalent (FTE) employees or more, are required to provide health insurance coverage for their employees; otherwise pay a fine.

Businesses with fewer than 50 FTE employees are not required to provide insurance coverage. This mandate directly discourages small businesses from growing into a 50+ FTE employee company because the fear of having to provide affordable health insurance coverage.

It is no question that businesses want to grow and employ more individuals; however, this mandate is threatening business owners with a high price for noncompliance that is causing some to stay small. This is particularly alarming for business owners because for the first time ever “full-time” is being redefined. Now, a full-time employee is someone who works 30 hours per week, averaged over the course of a month.

Individual mandate

As of January 1, 2014, individuals are required to maintain minimum health insurance coverage; otherwise pay a fine. Some individuals may be exempt, while others may qualify for financial assistance to help pay for their health insurance.

The penalties for noncompliance are as follows:

• In 2014, the fines will be $95 per adult, $47.50 per child, up to $285 per family or 1% of family income, whichever is greater

• In 2015, the fines significantly increase to $325 per adult, $162.50 per child, up to $975 per family or 2% of family income, whichever is greater

• In 2016 and beyond, the fines are projected to be $695 per adult, $347.50 per child, up to $2,085 per family or 2.5% of family income, whichever is greater

The Henry J. Kaiser Family Foundation provides a helpful flowchart that explains how the individual mandate works.

Tomorrow I will talk about the most recent arguments surrounding the delay of the employer-coverage mandate and the proposed delay of the individual mandate.