The Chicago Employment Law Blog

Preparing for Obamacare: Mandates, Penalties, and Exchanges

Like it or not, President Obama will remain in office for another four years. A more cynical individual might proclaim, "Republican, Democrat, Obama, Romney, it makes no difference. They're all crooks." Where it will make a difference, however, is in regards to the Affordable Care Act.

Governor Romney declared his intention to repeal most of the Obamacare legislation if he was elected. He lost. This means employers and employees need to prepare for the massive changes to healthcare coverage that will begin in 2014.

For larger employers, this will require them to pay for healthcare or pay a penalty. For employees, this could mean a reduction to part-time status (to avoid the mandate) or an increase in the employee's healthcare benefits, depending on the boss's approach to the new law. For those without healthcare, it could also mean that they will need to shop for coverage at some point in the upcoming year.

Mandate Schmandate

Employers prepare yourselves: the insur-calypse is coming! Well, not exactly. Obamacare requires employers with fifty or more full-time workers to provide healthcare coverage for employees working more than thirty hours per week. If not, they'll have to pay a $2,000 penalty per employee after the first thirty workers, reports the Chicago Sun-Times.

What are the employer's options? If they want to provide healthcare, they can use one of the new online insurance exchanges (see below) to find cheap coverage. Of course, the penalty might just be cheaper. There is also the option of eliminating some full-time positions and substituting multiple part-timers. According to a survey cited by the Sun-Times, 18 percent of employers already employing part-timers plan on exploring such a possibility in order to get under the fifty employee threshold.

Insurance Exchanges: Like Amazon for Healthcare

These online portals, set up by individual states or the Feds (if the state chooses not to), will be online marketplaces for insurance coverage. Employers and individuals alike can go online to shop for the best prices in coverage. Expect these sites to go live at some point in 2013, as Obamacare mandates begin on January 1, 2014.

The good news for individuals is that much of the coverage is subsidized by the federal government for those who aren't flush with cash. (Of course, subsidized on one end means paid for by taxes on the other.) According to the San Francisco Chronicle, Obamacare is expected to expand coverage to 30 million more Americans. Subsidies will be available for even those in the middle class - those making up to $90,000 for a family of four.

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