(PRWEB) October 03, 2012
Zane Benefits, which provides comprehensive and flexible defined contribution and private health exchange solutions, today published information and examples about individual health insurance tax subsidies under health care reform.
Beginning in 2014, massive tax subsidies will be available to help individuals buy individual health insurance coverage through the new state-based public exchanges. Tax subsidies will be available, beginning in 2014, for individuals who enroll in silver plans through an exchange. This subsidy caps the cost of an individual’s health insurance at 2% - 9.5% of their household income if their household income is less than 400% above the federal poverty line (that’s ~$90,000 per year for a family of 4 in 2012).
If an employee’s employer doesn’t offer a “qualified” and “affordable” company-sponsored group health plan, the employee gets a federal subsidy automatically applied to the cost of their individual health insurance policy. Large employers are charged $3,000 per year for each employee who receives the subsidy, up to a maximum of $2,000 per year for all employees. Employers with less than 50 employees are not charged anything if their employees receive the federal subsidy.
Tax Subsidies on Individual Health Insurance will Cause Businesses to Drop Coverage
Due to these massive tax subsidies on the individual market, virtually every employer with less than 50 employees will switch from group coverage to simply giving employees tax-free allowances via HRAs to purchase their own individual health insurance policy. And, most large employers will follow suit once they realize how large of a subsidy their employees receive if the employer doesn’t offer group coverage.
View the full article for examples of the individual health insurance tax subsidy.