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June 04, 2013 at 10:04 AM
Josie Martinez of EBS Capstone has posted a great blog article about the “skinny plan” strategy for coping with the Patient Protection and Affordable Care Act.
PPACA, of course, is going to impose all kinds of stupendous rules starting Oct. 1, 2013, or Jan. 1, 2014, or on some other date to be announced. (Unless some lawyer gets lucky and PPACA does no such thing, or some other amazing event occurs and makes folks wish they had used the conditional mood when referring to what the law could do, rather than the indicative.)
PPACA is supposed to require some individual people to have “minimum essential coverage” or else pay a penalty tax. (In the first year, the tax will be just $95.)
PPACA also lets employers with 50 or more full-time equivalent employees choose between offering coverage with a minimum value or paying a penalty.
If an affected employer offers no coverage at all, and at least one employee qualifies for subsidized coverage purchased through the new PPACA exchange system, the employer must pay an amount equal to $2,000 times a sum equal to the total number of full-time employees minus the first the first 30 full-time employees.
If an affected employer offers a skinny plan — coverage that fails to provide minimum value but is some kind of group coverage — then the penalty will be equal to $3,000 times the number of employees who actually go out and sign up and qualify for the new PPACA health insurance subsidy tax credit.
“This penalty would be much less than the penalty associated with not offering any health plan at all (the $2,000 penalty/every full-time employee),” Martinez writes.
