The Affordable Care Act requires employers with more than 50 full-time workers to offer insurance, but many find few low-income employees will buy it.
The New York Times reports on a major weakness of the Patient Protection and Affordable Care Act. Even if low wage hourly employees work for large employers as defined under the law, contributing to coverage that costs them nearly 10 percent of their earnings simply isn’t economically viable with other household budget items competing for scarce dollars. The Affordable Care Act’s individual shared responsibility mandate that includes tax penalties for not enrolling in employer-sponsored coverage will only add to their financial pain, particularly as the penalty increases for not having minimum essential coverage in 2015 to the higher of $325 per adult or two percent of household income. That’s likely to result in another Times story in April 2016 on hourly workers complaining that their 2015 income tax refunds have been significantly diminished by the penalties.
The irony is the Affordable Care Act is designed to increase access to affordable coverage, which it clearly isn’t doing here. As the story notes, uninsured low wage hourly employees have access to low cost primary care via community health centers and retail outlets. But they’ll continue to contribute to the burden of uncompensated care — another problem the law was intended to address — for costlier forms of medical care.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email