Many employers in the country are aware of some of the changes that have already been put in place by the Patient Protection and Affordable Care Act, (PPACA) covering dependent children to age 26, free preventative care, no more lifetime maximums on benefits, no preexisting condition limits for children, small business tax credits and W2 reporting requirements. However, fewer people are aware of things that are still to come. The insurance exchanges have been a hot topic of conversation with the “Pay or Play” concept. As the 2014 deadline approaches for states to institute their insurance exchange, employers must decide whether they want to pay the penalty or continue to provide employer sponsored health insurance. And in some instances, even though they continue to provide employer sponsored health insurance they may still pay a penalty.
Surveys on this question have been as varied as opinions about PPACA. One survey quotes that 30% of employers’ plan to drop employer sponsored health plans in favor of paying the $2,000 to $3,000 penalty for pushing workers to the exchanges. While other say it would actually be too costly for firms to shift their benefits to a federally –subsidized coverage bearing roughly $9,000 more in costs for that shift (Truven Health Analytics study). What’s the right answer for your business?