Finance & Enjoyment Blog

New Healthcare Bill - Penalties Enforced for Employers

Due to the recent Healthcare bill there will be new penalties enforced that may affect employers with over 50 full-time employees, or full-time employee equivalents. These new penalties have been enacted to encourage employers to provide employees with either health insurance or another health plan that pays for 60% of their employee’s health care costs.

If an employer fails to do this they will incur a $2,000 penalty for each employee beginning in 2014, with 30 employees being exempted from the calculation of the penalty. The government hopes this will account for part of the funding for the new healthcare bill as well as dissuading employees from relying on Medicare for health coverage.  Another possible result is that the financial burden is transferred to the employer for employee healthcare costs.

While this penalty could generate substantial additional costs to employers, employers may want to consider whether it would be cheaper not to provide coverage and absorb the $2,000 loss penalty per employee exceeding 30. The following is an example of the penalty calculation.

If a small medical practice employed 50 individuals, and they fail to provide either health insurance or pay for 60% of their employees healthcare costs, they will incur a $2,000 penalty for 20 employees.  This results in a $40,000 penalty each year beginning in 2014; it is important to note that if this example practice had just one fewer employee this penalty would no longer apply to the business.

While the costs of providing healthcare coverage for employees may exceed the amount of penalties that a company would face if they failed to provide any coverage to their employees, the employer should also consider the affect providing insurance would have on individual employee’s morale.

I hope you have found this informative, if you have any questions regarding this penalty for employers please contact KKB at 303-815-1100. We would love to help your practice wade through all the changes that are occurring in the medical field.
 


Posted in Successful Practice Management » Rules and Regulations »



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