Here, we address some of the most common misconceptions employers have about Obamacare.
Myth 1. Plans on the exchanges will be offered and operated by the government
No, the exchanges, which are basically online shopping portals, will be run by either your state or the federal government, but they will offer insurance plans run by private insurance companies. Neither your state nor the federal government are jumping into the business of health insurance.
Myth 2. Under Obamacare’s employer mandate, every company must provide health care to employees
No company is forced provide health coverage under the law. However, large employers (those with at least 50 workers) do face a steep tax penalty if they choose not to offer a plan that meets new affordability and minimum coverage requirements. It is that penalty that has become known as the “employer mandate” provision of the law.
Still, those employers are free to pay the extra taxes if they decide it works out better for their company.
More importantly, though, the law exempts companies with fewer than 50 employees, which represent 97 percent of U.S. businesses. So, nearly every employer in the country is exempt from penalties for not covering their workers.
Myth 3. The law’s employer mandate requirements have been delayed until 2015
Here is where it gets a bit technical. In July, Obama administration officials announced that they would not penalize large employers that do not provide adequate coverage to their employees during the first year (2014). However, the law still stands, and employers with 50 or more full-time workers are still supposed to offer plans that meet the new requirements — it is up to employers to choose whether to comply.
In other words, it isn’t that the speed limit has been abolished, but rather, the cops have just announced they will not be writing tickets this year.
Myth 4. If employers want to offer coverage, they must do so through the exchanges
Small business owners (and individual consumers, for that matter) can still purchase coverage through a private broker or directly from an insurer, though they must ensure the plans meet new federal requirements. In nearly every state, the new exchanges simply offer an alternative to the existing market.
One exception, though, is the District of Columbia, which elected to require small employers who want to purchase coverage to do so through the city’s new insurance exchange. Companies that already have coverage can keep it, but in the years ahead, they will have to renew through the exchange.