Obamacare question.

[Gregg]

I will be the first to admit I do not know much about this. I was golfing with some staunch Repubs and they were throwing some facts and fears around.I do not believe they can be correct, but how incorrect can they be? I am hoping to get some thoughts on this.

This is where I stand now.

Currently I pay $4700.00 a year for my health insurance for my family. As a benefit my company pays $15,500.00 per year.

If I understand them correctly, my company can pay a fine of $2200.00 per employee and have us pay for all of our own health insurance. That would be a savings for them of $13,300.00. It would raise my cost of health care from $391.66 per month to $1683.33 per month.

In the case of my company with only 250 of their 22,000 employees in the US, the savings is about 3.3 million. In the case of GE who has about 355,000 US it is about $4,721,500,000.00 per year.

Since all of the companies would save money, it would seem a no brainer to pay the fine. They would not lose employees moving to other companies for health benefits as all would be in the same boat.

There must be a whole lot more to the story than this. If the above is true it would ruin me.

I appreciate in advance any input.

[Lurker765]

I will be the first to admit I do not know much about this. I was golfing with some staunch Repubs and they were throwing some facts and fears around.I do not believe they can be correct, but how incorrect can they be? I am hoping to get some thoughts on this.

This is where I stand now.

Currently I pay $4700.00 a year for my health insurance for my family. As a benefit my company pays $15,500.00 per year.

If I understand them correctly, my company can pay a fine of $2200.00 per employee and have us pay for all of our own health insurance. That would be a savings for them of $13,300.00. It would raise my cost of health care from $391.66 per month to $1683.33 per month.

In the case of my company with only 250 of their 22,000 employees in the US, the savings is about 3.3 million. In the case of GE who has about 355,000 US it is about $4,721,500,000.00 per year.

Since all of the companies would save money, it would seem a no brainer to pay the fine. They would not lose employees moving to other companies for health benefits as all would be in the same boat.

There must be a whole lot more to the story than this. If the above is true it would ruin me.

I appreciate in advance any input.

Your company can currently pay $0 for your health insurance. It is not a requirement for them to pay ANYTHING prior to Obamacare. Since all the companies would save money by not paying health insurance it would be a no brainer to not pay. They would not lose employees moving to other companies for health benefits as all would be in the same boat.

Since this is not currently the case, it seems that companies feel that paying health insurance for their employees provides a benefit to them in recruiting and retaining employees. This same logic would apply post-Obamacare with the added proviso that they are now fined if they don't provide coverage.

Nothing changed in this situation except that employers now have a little extra incentive to provide health care for their employees.

[Mithrandir]

Your company can currently pay $0 for your health insurance. It is not a requirement for them to pay ANYTHING prior to Obamacare. Since all the companies would save money by not paying health insurance it would be a no brainer to not pay. They would not lose employees moving to other companies for health benefits as all would be in the same boat.

Since this is not currently the case, it seems that companies feel that paying health insurance for their employees provides a benefit to them in recruiting and retaining employees. This same logic would apply post-Obamacare with the added proviso that they are now fined if they don't provide coverage.

Nothing changed in this situation except that employers now have a little extra incentive to provide health care for their employees.

An interesting spin on the matter.

[Gregg]

Most of what you say is true, although the penalty is only for employers with over 50 employees. I think we can expect a lot of companies to dump their coverage and their employees will seek insurance on the open market. You know that you don't have to stay with your expensive current provider, right? Free market! Woo, conservatives win!

Thank you for the response.

Not to argue but to seek further input. When I was self employed as a rep i could not find cheaper health care (that was worth anything) for less than approx. $1200.00 per month. Will the new rules make insurance more competitive?

[Gregg]

Only an estimated 8% of businesses are expected to pay the fines, according to surveys. If yours is one of them, I'd strongly urge you to take that into consideration when you use your free market ability to choose employers.

I am not as bold at age 59 (with no plans to retire) as I was at age 45.

The rumor is that GE will pay the fine and give each employee a $5000.00 check towards insurance. This would save them approx. $6,000.00 per.

Will insurance remain a viable tax write off for Corperations in the new system?

[Gregg]

Your company can currently pay $0 for your health insurance. It is not a requirement for them to pay ANYTHING prior to Obamacare. Since all the companies would save money by not paying health insurance it would be a no brainer to not pay. They would not lose employees moving to other companies for health benefits as all would be in the same boat.

Since this is not currently the case, it seems that companies feel that paying health insurance for their employees provides a benefit to them in recruiting and retaining employees. This same logic would apply post-Obamacare with the added proviso that they are now fined if they don't provide coverage.

Nothing changed in this situation except that employers now have a little extra incentive to provide health care for their employees.

Thank you for your response. What you are saying does make sense (and actually gives some comfort). I have noticed that over the years companies have reduced coverage or have forced employees to particpate more than ever before.

I have also seen companies make some penny wise dollar foolish mistakes in the name of almighty profit in recent years. This would seem like a good excuse to do just that.

Still you make a pretty valid point on the competitive side of things.

[GwynnInTheHall]

Thank you for the response.

Not to argue but to seek further input. When I was self employed as a rep i could not find cheaper health care (that was worth anything) for less than approx. $1200.00 per month. Will the new rules make insurance more competitive?

at 59 who do you have to cover besides you and your spouse? Wont you qualify for medicare by the time the mandates kick in? and if you can't find decent coverage for under 1200 you have far better coverage than most as when I mentioned not having health coverage, many i here insisted I could find some for 200 or so a month, when in reality basic coverage that is actually useful starts at around 350.

[revo]

Your company can currently pay $0 for your health insurance. It is not a requirement for them to pay ANYTHING prior to Obamacare. Since all the companies would save money by not paying health insurance it would be a no brainer to not pay. They would not lose employees moving to other companies for health benefits as all would be in the same boat.

Since this is not currently the case, it seems that companies feel that paying health insurance for their employees provides a benefit to them in recruiting and retaining employees. This same logic would apply post-Obamacare with the added proviso that they are now fined if they don't provide coverage.

Nothing changed in this situation except that employers now have a little extra incentive to provide health care for their employees.

As a financial advisor who also consults on small company benefit plans, this is the proper line of thinking. Gregg is correct that a company will pay $2,200 per employee as a fine, but by that token, how will a company attract and retain employees? By letting them take a $7,000 bath, as in Gregg's case? The animosity among employees will be pretty high.

A small company in NJ can get an HSA plan through a major carrier at a cost of about $225/month. It's a high deductible plan, but it's good in case of a major medical problem. So why would a company eliminate their plan entirely and leave it up to the employee, when a crappy plan will cost nearly the same as a fine?

Plus, a company can add a PEO and get a great plan through a major carrier for about $50/month more.

So honestly, the only businesses who eliminate their coverage entirely will be the ones who don't have any knowledge about their alternative options.

[Gregg]

at 59 who do you have to cover besides you and your spouse? Wont you qualify for medicare by the time the mandates kick in? and if you can't find decent coverage for under 1200 you have far better coverage than most as when I mentioned not having health coverage, many i here insisted I could find some for 200 or so a month, when in reality basic coverage that is actually useful starts at around 350.

My 17 and 20 year old daughters.

Some might argue that I worked hard for and picked companies that had good benefits.

I do not know much about medicare as I planned on working for a along time and with companies that supplied health care benefits.

I was not one of those who thought you could get health coverage for 200 or so a month.

[GwynnInTheHall]

My 17 and 20 year old daughters.

Some might argue that I worked hard for and picked companies that had good benefits.

I do not know much about medicare as I planned on working for a along time and with companies that supplied health care benefits.

I was not one of those who thought you could get health coverage for 200 or so a month.

So Obama care wil be good for you as you can keep the kids on for a while!

To make sure I understand-- you paid more for better coverage because you could and felt you'd earned that perk--which is cool. It was just the way you proposed to question made it sound as if it were your only choice.

And I thought I had kids late in life LOL.

[Gregg]

So Obama care wil be good for you as you can keep the kids on for a while!

To make sure I understand-- you paid more for better coverage because you could and felt you'd earned that perk--which is cool. It was just the way you proposed to question made it sound as if it were your only choice.

And I thought I had kids late in life LOL.

While we/I did have a choice to pay a little more (for better coverage) within the guidelines of the company choices, if the company chooses to not cover us, it would be an out of pocket expense of $13k more per year for the same coverage. It drops down to about $11k more if I base it on the lesser/more deductable plan. That said the cheapest I could find when I was on my own, was about 1200 per month for my family of 4. It was one of the deciding factors in me hanging up my business and becoming someone else's employee. I cannot make ends meet if I have to self insure (unless something happens and it is more competitive).

I got married late in life, but married a woman 9 years younger than me. My first was born when I was 39. Keeps me young.

[revo]

While we/I did have a choice to pay a little more (for better coverage) within the guidelines of the company choices, if the company chooses to not cover us, it would be an out of pocket expense of $13k more per year for the same coverage. It drops down to about $11k more if I base it on the lesser/more deductable plan. That said the cheapest I could find when I was on my own, was about 1200 per month for my family of 4. It was one of the deciding factors in me hanging up my business and becoming someone else's employee. I cannot make ends meet if I have to self insure (unless something happens and it is more competitive).

I got married late in life, but married a woman 9 years younger than me. My first was born when I was 39. Keeps me young.

At over $20k for a family, you must have a GREAT plan. Most of the top plans in the NY/NJ area are $1500/mo for family plans.

[Judge Jude]

"My first was born when I was 39. Keeps me young."

My parents always said this - Mom was 39 and Dad was 43 with me on the end of the litter - ancient for their era.

Dad made 92 and still lived independently til the end.
You've only just begun!

[Pogues]

Just find a plan to cover the MAJOR stuff and foot the bill for the rest of your medical issues. I find it hard to believe that most of us spend anything near what we and our company pays for our health insurance, not including major procedures.

[Gregg]

As a financial advisor who also consults on small company benefit plans, this is the proper line of thinking. Gregg is correct that a company will pay $2,200 per employee as a fine, but by that token, how will a company attract and retain employees? By letting them take a $7,000 bath, as in Gregg's case? The animosity among employees will be pretty high.

A small company in NJ can get an HSA plan through a major carrier at a cost of about $225/month. It's a high deductible plan, but it's good in case of a major medical problem. So why would a company eliminate their plan entirely and leave it up to the employee, when a crappy plan will cost nearly the same as a fine?

Plus, a company can add a PEO and get a great plan through a major carrier for about $50/month more.

So honestly, the only businesses who eliminate their coverage entirely will be the ones who don't have any knowledge about their alternative options.

Thank you for your input. I hope you are correct.

What are the deducts on the policy that you can get for 275 per month? Is this something that is available in all states?

We have Blue Cross Blue Shield of Georgia for our HQ, but I think mine is Blue Cross Blue Shield of Illinois.