Health Insurance Law: 5 Surprising Rulings

There have been many changes to health insurance law that have had a substantial impact on consumers. Recently, in 2010, Congress passed a law to try to provide health insurance coverage to almost every American citizen. The passage of this law has been met with both hostility and support by both political parties. The final bill, which predicts health insurance coverage for 97 percent of Americans, is the most expensive bill to address health insurance in the history of our country. The bill is expected to increase our country’s national debt, which many people thought was already far too great before the bill’s passage.

Health Insurance Coverage under COBRA

The people most affected by this decision are unemployed workers. Through a federal program called COBRA, unemployed workers are eligible to continue their health insurance coverage offered by their former employer at 102 percent of the cost paid by their previous company. For most unemployed workers with families, this cost can easily exceed $1,000 per month for the insurance premium. COBRA coverage is available for up to 18 months after an employee is laid off.

Economic Stimulus Bill Impact on COBRA

Late last year (2009), Congress passed an economic stimulus bill. This bill provided for the government to pay up to 65 percent of the cost of the premiums for COBRA for unemployed people. This program was designed to help the approximate 10 percent of the country that is unemployed while they search for new employment. Recently, the economic stimulus bill expired, leaving workers with the burden of paying 100 percent of their COBRA premiums. Congress has failed to renew the stimulus bill.

Health Care Law May Result in Loss of Coverage

Another recent surprise from the new health care law is that many companies are lining up to drop the health insurance benefits they offer to their employees. Instead, they are willing to pay the penalties imposed as part of the health care bill. Major companies claim that it will be cheaper to pay the penalties than it is to offer health insurance coverage for their employees. Employees at these companies face the possibility of no longer having health insurance.

Reporting Requirements of Health Care Law

The health care bill greatly affects firms that employ 50 or more people. Companies that have fewer than 50 employees are exempt from the reporting requirements in the new health care bill. Larger companies are required to provide health care coverage or pay a fine of $2,000 per employee. The reporting requirements for the new bill require employers to report the cost of health insurance on employees' W-2s, submit period reports to the Department of Health and Human Services and meet new reporting requirements from the IRS.

Impact on Businesses

Most full-time employees today get health insurance as a benefit offered by their employer. With the new health care law, many employees may be facing changes to their health insurance coverage. Many employees in smaller companies will be able to have access to health insurance that was not previously provided by their employer. Employees at larger companies may lose their coverage as their employers find it cheaper to pay penalties than to pay for the health insurance coverage.

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