Businesses Brace for the Cost of Obamacare

Thursday, 08 Nov 2012 08:32 AM

By Peter Moses

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Now that President Barack Obama has won a second term, Obamacare moves back to front and center for businesses and state governments. So what’s next as universal healthcare becomes the law of the land on Jan. 1, 2014?

That depends on who you ask. There is still certainly strong opposition to the mandate, and one state, Missouri, passed a ballot initiative Tuesday that prohibits that state from creating its own health insurance exchange, according to the Washington Post.

In addition, exit polls taken after Americans voted Tuesday also showed many Americans do not support the Affordable Care Act, the Post reported.

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

But the law passed congressional muster after a long and drawn out fight and a Supreme Court ruling, so like it or not, some form of the law will likely go into effect in 2014.

The federal government’s decision to extend private insurance to 30 million Americans now needs cooperation from some very uncooperative states.

The timeline to get this done is getting short, as the Obama administration set a Nov. 16 cutoff for states to inform the administration about whether they are going to set up their own health insurance exchange. So far, just 10 states have passed laws or had governors sign executive orders that commit to the program, according to the Post.

For those who own a business, there are many issues that will need to be considered, Henry J. Aaron, senior fellow at the Brookings Institute, told CNBC.

The first is to weigh the cost to the business. If a health plan is offered do you want to continue to offer it, or would it be better to allow employees to set up their own coverage? Companies with fewer than 50 employees are not subject to the penalties for not having a plan in place. Those firms with fewer than 25 full-time employees earning less than $50,000 on average are now eligible for a 35 percent tax credit for offering insurance, which would jump to 50 percent in 2014, according to Aaron.

Employers should also look at their individual state’s approach to the issue. Some states will take an active role, while other will look to the federal government for help administering the plan.

Also, while states have only until Nov. 16 to provide plans to the federal government, enrollment does not begin until next October at the earliest, Aaron explained.

“It’s a complicated bill, and it’s not drafted in a way to facilitate implementation,” he told CNBC. “Delays could become inevitable and necessary.”

Editor's Note: You Owe It to Yourself to Know What Obama and Bernanke Are Hiding From Americans

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