Park City, Utah (PRWEB) May 23, 2013
Today, Zane Benefits, Inc. published a new information on the employer mandate. Zane Benefits, which provides comprehensive and flexible alternatives to traditional employer sponsored health benefits, is the leader in defined contribution plans and health reimbursement arrangements.
With health care reform, a common question from employees is “does my employer have to provide health insurance?” According to Zane Benefits’ website, not necessarily. The health care reform law, called the Affordable Care Act (ACA), requires certain employers to purchase health insurance or else pay a tax penalty.
Employer Mandate to Offer Coverage
According to Zane Benefits’ website, starting January 1, 2014 employers with 50 or more full time equivalent (FTE) employees are required to provide health coverage to full-time employees or else pay a tax penalty. This is commonly referred to as the employer mandate.
Employers with less than 50 FTE employees are not subject to these tax penalties for not offering health insurance coverage, although if the employer does provide health insurance they might be eligible for tax credits.
According to Zane Benefits’ website even with the tax penalty, many employers with more than 50 FTE employees will calculate the cost of not providing health insurance and find it is more cost-effective to offer an alternative health insurance solution such as a defined contribution plan. For example, they may choose to send employees to their state health insurance exchanges. Employers would then provide a Health Reimbursement Arrangement (HRA) to reimburse employees for a portion of their policy.
Individual Mandate for Insurance Coverage
According to Zane Benefits’ website, starting in January 2014, health care reform requires most individuals to either be covered under health insurance, or pay a tax penalty.
Coverage can include employer-provided insurance, individual health insurance, Medicare or Medicaid. The tax penalty phases in over three years and becomes increasingly severe. In 2014, the penalty will be 1 percent of annual income or $95, whichever is greater. By 2016, the penalty will be 2.5 percent of income or $695, whichever is greater. This means that if an individual does not have coverage in 2014, he or she will be required to pay a tax penalty when filing taxes at the end of the year.
The total penalty for the taxable year cannot exceed the national average of the annual premiums of a bronze-level health insurance plan offered through the health insurance marketplaces. Health insurance plans will provide proof of coverage for their customers. Several groups are exempt from the requirement to obtain coverage or pay the penalty, including:
- People who would have to pay more than 8 percent of their income for health insurance
- People with incomes below the threshold required for filing taxes (in 2012, $9,750 for a single person and $27,100 for a married couple with two children)
- People who qualify for religious exemptions
- Undocumented immigrants
- People who are incarcerated
- Members of Native American tribes
If an individual does not have insurance and does not fit into one of these categories, then they will likely pay the tax penalty.
About Zane Benefits
Zane Benefits was founded in 2006 to provide a revolutionized SaaS (Software-as-a-Service) administration platform ("ZaneHRA") for Health Reimbursement Arrangements (HRAs) and defined contribution health care. The flagship software provides a 100% paperless administration experience to employers and insurance professionals that want to offer better health benefits without a traditional group health insurance plan at lower costs. For more information about ZaneHRA, visit http://www.zanebenefits.com.