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My family business provides a Blue Cross PPO plan to its employees. It's a good plan, but the deductibles and premiums keep going up. My brother wants to keep it, but says that he will face penalties under the ACA as a result. The alternative, he says, is a "crappy HMO." I'm wondering if he is being misled by insurance agents, or if indeed the ACA penalizes an employer (100+) that goes above and beyond basic requirements.

I'm aware of the 9.5% of income threshold. That is the only aspect of the law that could account for this penalty. Could anyone please help set me straight? My first instinct was that the insurance company is lying, but my brother, a republican, claims to have run the numbers.

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Comment Preferences

  •  Tip Jar (6+ / 0-)

    Don't give up... hold our party leaders accountable.

    by owl06 on Mon Nov 19, 2012 at 04:07:29 PM PST

  •  I belive misled (1+ / 0-)
    Recommended by:
    owl06 should have the answers you need.

    The 47% also "pay all the taxes that are legally required and not a dollar more" but when Romney does it he thinks it's a virtue, while when they do it, he thinks they are deadbeats.

    by jsfox on Mon Nov 19, 2012 at 04:25:05 PM PST

  •  Your brother's insurance agent knows (1+ / 0-)
    Recommended by:

    ...perfectly well the answer to that question. Blue Cross is a major provider in the ACA system. They have no intention of losing business clients.

    A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

    by Pluto on Mon Nov 19, 2012 at 04:32:40 PM PST

  •  think what u sd: penalty 4 providing MORE than (0+ / 0-)

    'basic requirements'.  IOW, for providing more and better coverage than the law requires, if true.

    In what world could that possibly be true?

    Only in Thug fantasyland.

    IOW, its pure bs.

  •  I've never heard anything about this (1+ / 0-)
    Recommended by:
    Rachel Q

    I wonder if the premium going up is the issue.  Could the premium then be too high a percentage of the lower-paid employees salaries?  

  •  There is more out there (0+ / 0-)

    There are a lot of plans out there between a high end PPO and a crappy HMO.  I think your brother is taking something that is legitimately true about the law and spinning it to make a political point.

  •  Cadillac Tax (1+ / 0-)
    Recommended by:

    I think he is referring to the Cadillac Tax which doesn't even go onto effect until 2018.  More information here:

  •  After some googling, I see what you mean about... (3+ / 0-)
    Recommended by:
    4mygirls, phonegery, JamieG from Md

    the 9.5% threshold. Employees are eligible to shop on the exchange if their employer's plan costs more than 9.5% of their income. If an employee gets a subsidy on the exchange then the employer will have to pay a penalty.

    Kaiser has a flow chart:

    Sounds like the high earners in lots of companies will be frustrated if their sweet packages go away because the help can't afford the coverage.

    There are a lot of measures in the ACA that are designed to put downward pressure on prices, wonder if this is one of them? It gives insurers an incentive to create the best possible plan that doesn't exceed 9.5% of the income of a full-time minimum wage worker.

    •  Two other things I thought of... (1+ / 0-)
      Recommended by:

      1. The penalty is only $3000/employee receiving a tax credit, which is less than the employer contribution to a health insurance plan. So the only way the penalty costs money is if you have employees now who are declining coverage.

      2. The limit on the cost of the insurance plan is actually for the employee contribution... not the whole cost of the plan.

  •  There is nothing in the ACA that would (1+ / 0-)
    Recommended by:
    Rachel Q

    penalize providing more than the minimum requirements. IF it is more expensive (in total) after 2018 then there is a tax on the insurers.

    I think BX/BS is trying to lock the employees into their own slate of providers. Your brother ought to shop around and let BX/BC know he is doing so.

    Most reports I have heard are that premium costs are at most increasing at the lowest rate in over a decade. Many are seeing no change and even some reductions.

    I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

    by samddobermann on Tue Nov 20, 2012 at 05:26:35 AM PST

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