Health Insurance Tax - 2014
Most everybody across the country knows that the Affordable Care Act (PPACA), commonly referred to as Obamacare was passed in 2010. There was debate that went to the Supreme Court over whether the law was legal. The Supreme Court ruled that the United States government is basically imposing a tax not a "penalty" so it was declared lawful. Many people referred to this as a health insurance tax and not a health insurance program. It turns out that they may have been more accurate than we thought.
Starting in 2014, there will be a health insurance tax that is imposed on the fully insured market (Self-Funded Plans are Exempt). Currently most groups are on a fully insured plan and probably 90% of companies across the United States with under 50 employees are self-insured. Now that people have had time to read the bill, this health insurance tax will greatly hinder small business production.
2014 Health Insurance Tax
How much is this health insurance tax that takes place in 2014?
- PPACA will assess each health insurance company based on their "net premiums written" to know how much the tax will be to each insurance company.
- The insurance companies will pass this along to the business on a fully insured group plan or individual plan.
- The average family should see an increase of roughly $500 a year.
- The insurer fee in 2014 will be 8 billion dollars.
- The health insurance tax increases to 14.3 billion in 2018
2014 Health Insurance Tax - Obamacare
Basically this law just created a lot of extra taxes on our health insurance that will ultimately make our premiums increases. The loss ratios haven't even started for these plans and we know just on this one portion that there is an extra 8 billion dollars in expenses. Now throw in No Insured Maximums, No Health Questions, and 1,400 pages of new laws to comply with and you get yourself a nice little rate increase.
What does this tax pay for and what products are affected?
This tax is built to pay for the subsidies of individuals between 100% and 400% of poverty level. Which some people may benefit greatly from this tax because they will receive their insurance at a much lower premium.
Products affected by this tax will include group health plans, individual plans, Medicare Advantage Plans and supposedly Part D plans. In the law Medicare Supplement Insurance is exempt from this tax. Medigap plans are also not under the same guidelines of no health questions.
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