On March 23, 2010, President Obama signed into law a landmark health insurance reform law, officially titled the Patient Protection and Affordable Care Act. Under the law, beginning in 2014, all Americans will need to prove that they have health insurance coverage or be subjected to tax penalties. The law then provides a variety of measures for making affordable health insurance available to all people, including affordability credits for the uninsured, expansion of Medicare and Medicaid eligibility, employer shared responsibility and insurance exchanges. For a person reviewing health insurance quotes today, it is vital to recognize how this new law will impact the cost and availability of health insurance in the months and years to come.

Although the new law is an individual mandate for all people to have health insurance, there are specific provisions that encourage employer shared responsibility for providing health care coverage. In particular, the law establishes a "pay or play" system for larger employers. These employers can choose to play by covering 72.5 percent of the premium costs for full-time employees, and up to 65 percent of the premium costs for eligible dependents. If an employer opts not to provide health insurance on these terms, it will be required to pay a fee, ranging between 2 and 8 percent of payroll, depending on the size of the company.

Under the new law, the employer shared responsibility fees will be collected and deposited into a Health Insurance Exchange Trust Fund. The proceeds of the fund will then support affordability credits for people who are not offered health insurance through their employers. The affordability credits will be made available on a sliding scale based on income; people with lower incomes will be provided with higher amounts of affordability credits.

Small employers are exempt from the "pay or play" system and will not be required pay employer shared responsibility fees if they do not provide health insurance to full-time employees. Under the law, a small employer is defined as a company with less than $250,000 in revenue or fewer than 25 employees. Employees of these companies, if uninsured, will be able to purchase affordable insurance through the insurance exchanges.

The concept behind employer shared responsibility is to encourage larger employers to offer health insurance to their employees. Large employers have the purchasing power to negotiate rates on their group plans that are much more affordable than rates on individual plans. If the employer shared responsibility fee is high enough, most large employers will eventually choose to avoid the fee by offering affordable insurance to their employees.

We can help you to find coverage today. To obtain affordable health insurance quotes, fill out the request form on this site.

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