Health Insurance and the Affordable Care Act

Introduction

The American healthcare system underwent major reform with the passage of the Affordable Care Act (ACA) in 2010 by the Obama administration. It was a fundamental shift in provider coverage to get affordable health care out to the population. Now, the majority of the costs lay upon the federal government shared with businesses through subsidies to individuals. When choosing an insurance plan for employees, an organization must consider many factors to make the most cost-effective choice while still being within the boundaries of the ACA.

Affordable Care Act

If there was a hypothetical start-up technology firm that was looking at its options for employee health coverage, it would look at the available online marketplace. There is a myriad of plans available through various insurance firms, but they are usually split up into levels: bronze, silver, gold, and platinum. As levels go up, so do the premiums, and a bigger percentage of the health care cost is covered. Per ACA regulations all plans provided by employers must cover the same standard set of essential benefits, with no discrimination based on pre-existing conditions. (UC Berkley Labor Center, 2014). As a technology firm attempting to establish a reputation with benefits to attract highly skilled workers, it is important to choose a plan that offers decent benefits even if it is a financial loss. It is crucial to look at the general layout of health amongst the employees. As a technology firm, the employees are usually young graduates and professionals. They are highly educated, leading an active lifestyle, most likely without spouses or dependents. Taking this into consideration, while most may be at the peak of their health, the modern youth tries to get seen by a doctor for checkups. Also, because the employees are young they probably are not financially able to pay high premiums. All things considered, a plan on the silver or gold level would be most enticing, with available preventive services. It is important to calculate the most financially fiscal plan with the necessary tax benefits to make it beneficial.

Obamacare made employers provide insurance a requirement for any business or organization with more than 50 full-time employees or face severe penalties. Under the ACA, there are still tax breaks available to firms providing coverage, no matter the number of employees. These are incentives to keep work-based coverage rather than personal so that government does not have to subsidize each individual (Blavin, Shartzer, Long, & Holahan, 2015). Providing healthcare attracts dedicated professionals, who would be looking for benefits. With the available healthcare, employees are satisfied and healthier. With the passage of ACA, however, many employers chose to drop coverage and face penalties because of the financial burden. Other employers had layoffs or cut full-time employees to part-time, which hurt many people. Those affected were hourly wage workers since overtime was no longer available. To make up for the lost hours, employers hired many workers working shorter hours, which in turn caused high staff turnover and financial loss. Disadvantages of providing workplace healthcare include having costs both in premiums and numerous administrative filings that the ACA requires. There may also be concern amongst employees about the chosen health plan (Pratt, 2013). Employers must now design and ensure that all their health coverage plans are compliant with the law.

Conclusion

With the passage of the Affordable Care Act, the workplace insurance market changed dramatically, but it helped to combat the growing costs of medical care. Many businesses were forced to make difficult decisions regarding their employees and healthcare. To this day there is controversy around the business provision of ACA, disputing its economic impact and social benefit.

References

Blavin, F., Shartzer, A., Long, S. K., & Holahan, J. (2015). An early look at changes in employer-sponsored insurance under the affordable care act. Health Affairs, 34(1), 170-177. Web.

UC Berkley Labor Center (2014). Summary of Provisions Affecting Employer-Sponsored Insurance. Web.

Pratt, D. A. (2013). Focus on… the affordable care act: What should employers do now? Journal of Pension Benefits, 20(3), 19-26.