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Affordable Healthcare Act Can Change Relationships Between Employers and Employee

When the US President Obama introduced the Affordable Care Act, little was the healthcare system aware of how it would radically change the way they would operate and the way they would be delivering services to patients. One of the biggest challenge of the Obamacare act is the basic fact that the law is still fluid and it keeps changing as the President and other policy makers of the US government think about the consequences that it can bring along.

For those in the healthcare industry like the CEO of Accretive Health, Mary Tolan thinks that the act has completely reshaped the way healthcare service providers have been working before. Being in the industry, she is facing the effects of the Act first hand and yet she believes that the Act has the power to change the healthcare system for good. To cite an instance, under the Act, by 2014, the employers with more than 50 employees would have to offer them health insurance coverage or pay a penalty. While the thought was good, it was the fluidity of the law that pushed the deadline to 2015 and businesses with 100 employees, which again got pushed to 2016.

Affordable Healthcare Act Can Change Relationships Between Employers and Employee

This means that the employees can wait until 2016 before complying with the Act. However, Mary A. Tolan thinks that the Act would definitely affect the taxes and operation of any business which has an equivalent of more than 50 employees. It would require the businesses to offer coverage to their employees that are both affordable and of minimum value otherwise pay fine. Mary Tolan of Accretive Health thinks that affordable coverage would mean that would cost no more than 9.5% of the W-2 income. For the insurance coverage to meet the minimum standards, it should at least pay 60% of the total cost.

Those employers who do not offer the cost of their employee’s insurance should report the premiums on their W-2 forms. This would also include the health care costs on their business income taxes. For those who do not even report, there is a chance, that Mary Tolan thinks that the employer may face a fine. The fine would be levied if at least one worker would use the health insurance marketplace and the same worker is qualified for tax credit. The fine is whopping USD 2000 per employee, after the first 30 employees. What is important is to understand the fact that for an employer to determine whether the firm hires 50 or more full time employees is not that easy.

The full time employees are defined as those who work for more than 30 hours a week. Mary A Tolan  thinks that it becomes a little difficult companies who have seasonal or part time employees, complicating the process. Each batch of part time employees who would provide 30 hours of work is equivalent to full time position, which means that if those hours bring an employer’s full time equivalents to 50 or more, the enterprise would face the mandate.