The Affordable Care Act was introduced to provide all Americans with affordable health care coverage while lowering the burden of health care costs on individuals and the government. The act is designed to provide preventative care before the need for long-term care occurs. With the cost of doctor and nurse visits rising, it’s important to ensure access to health coverage is available to Americans. Additionally, our own health care employees need to be made aware of the effects the ACA has on their own health care.
October 1st Deadline for Businesses
As of today, any employer with a staff of at least two employees and $500K in annual sales must provide a statement to their employees that informs them whether their employer-sponsored health plan meets the minimum requirements and is considered affordable under the ACA laws. If it doesn’t, employees will be eligible for a tax credit. For those in the nursing field working at a clinic, hospital, or small facility there is often a staff of over two and annual sales of $500K or more.
How it Affects 2014 Taxes
Beginning in the 2014 tax year those who can afford health insurance but opt not to purchase it will be subject to a minimum tax penalty of $95 per year or 1 percent of your income whichever is higher. You should be aware that this will rise in 2016 to a minimum tax payment of $695 annually (or 2.5%) of your income. For 2014 the maximum amount is capped at $285 for families and that will rise to $2,085 in 2016.
You are exempt from the tax if you have any of the following considerations:
- Your employer provides your insurance
- You have insurance through government agencies such as Medicare
- It would cost you 8% of your income to pay for health insurance
Nurses and doctors often opt for insurance, but those who opt out are not likely to be exempt given their salaries are often high enough to afford insurance payments. Although expenses can be plentiful for this particular profession, given the need to purchase some medical devices on their own, Dansko shoes, nurse uniforms such as Cherokee uniforms, as well as stethoscopes or other items almost all nurses and doctors are still likely not to be exempt. The ACA doesn’t take into consideration employee costs that often are a requirement of the given profession like with nurses, doctors and teachers who often pay out of pocket for items they need to do their job effectively.
Qualifications and Existing Health Issues
Once January 2014 rolls around insurance companies will not be permitted to deny health coverage to patients with pre-existing health issues. This provision allows people who become seriously ill the right to buy health insurance as well as to buy it at the same price as a perfectly healthy person. The ACA also prevents insurance companies charging more based on gender. Further benefits to American patients include:
- No more rescission allowing insurers the right to cancel your insurance should you become ill.
- Answers from independent reviewers within 72 hours if your claim is denied.
- Lifetime limits are now illegal which means your insurer can no longer set limits on how much they will cover when you are experiencing a long-term illness.
- No limits to the amount of coverage you are eligible for beginning in January 2014. However, insurance companies can put caps on items like hospital stays, doctors’ visits, and prescription medications.
With more patients coming through hospital, clinic, and facility doors that will have insurance it is likely that nurses will be in high demand. Many Americans who have pre-existing conditions but do not have insurance avoid health care facilities. With more Americans gaining access to insurance it’s likely that nursing will have a shortage, some are touting it to be as much as 1.2 million nurses by 2020.
Insurance Offered by Employers
The ACA does not dictate that businesses must provide health insurance for your employees. In fact, most businesses in the US with more than 50 employees do provide good health insurance coverage as an incentive to attract qualified employees to join their companies. However, there is a provision that companies with 50 or more employees who opt not to provide insurance will be subject to penalties.
To encourage small businesses and non-profits to provide insurance to their employees the government is offering tax incentives. Businesses with less than 25 employees can receive up to 35% of their premiums as long as they are paying for 50% of their staff’s coverage and employees salaries average less than $50K annually. This will rise to 50% in 2014. Non-profits can receive a tax credit of 25% rising to 35% in 2014.
Marketplace Administrative Costs Compared to Broker Commissions
The ACA still allows you to find and purchase insurance on your own. However, the introduction of online marketplaces or exchanges make buying insurance less complicated as well as provide instant access to any incentives and tax breaks you may be qualified to use. This means instant savings once you find the package suited to your needs. This information is not readily available when you use a broker to buy your insurance.
Self-employed and the ACA
If you are self-employed you may be eligible for cost-sharing reductions and premium tax credits. Cost sharing uses a sliding scale based on your income. Providing breaks to the self-employed is incentive for entrepreneurs to strike out on their own and encourage the creation of more small businesses.
Americans can benefit from the proactive, preventative approach to health care promoted through the ACA and feel safe in the knowledge they will never be faced with unmanageable debt should they fall ill. It is likely that in the field of nursing the benefits outweigh the negatives due to the job security, additional need for nurses, and providers welcoming patients with pre-existing conditions.