By Bill Rusteberg
Large employers typically sponsor ACA complaint claim paying group health insurance policies instead of lower cost government enforced premium only policies.
Large employers who don’t offer claim paying ACA compliant health insurance are punished with a $278.33 “tax” per employee per month (PEPM). This government enforced health care scheme supports non-compliant ACA premium only health plans with a guaranteed annual premium cap.
The good news is there is no “tax” on the first 30 employees. These lucky individuals get a free premium non-compliant ACA health plan alternative.
Premium only plans are a hell of a lot cheaper than claim paying group health plans. That’s something to write home about.
Based on a 40 hour week, non-complaint large groups (50 employees or more) the hourly wage to cover a premium only plan is $1.74. There’s not much more you can buy with $1.74 anymore except a poke in the eye.
Rather than paying an average cost of $550 pepm for group health insurance the employer may gift all employees a pay raise equal to the difference between the group health plan employee only rate and the tax penalty of $278.33. That would effectively increase the average worker’s take home pay by +$3,000 per year. Now Jorge Sixpack can make a down payment on that bass boat he’s always been dreaming about.
Employees are free to purchase individual, guarantee issue, pre-existing conditions covered, claim paying health insurance on the open market. Those who qualify will receive federal subsidies and, in many cases, the net cost can be $30 per month or less. Most will get back more in benefits than the taxman confiscates off their labor.
Meanwhile most working, nickel rubbing Americans continue to be covered through ACA compliant claim paying employer sponsored health plans by way of lower wages in return for benefits they can’t afford to use.
