Obamacare Penalties Spawn Bare-Bones Insurance for Workers

Tuesday, 16 Jul 2013 05:03 PM

By Dan Weil

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Many companies plan to offer only basic insurance plans to their employees to avoid the penalties of the Affordable Care Act.

The law requires employers with 50 or more full-time workers to offer them health insurance or pay a fine. That employer mandate was supposed to begin Jan. 1, 2014, but earlier this month the Obama administration postponed it for a year.

Still, some companies intend to provide what are known as "skinny plans" to avoid Obamacare's biggest penalties, industry consultants tell Politico.

The Obama administration has signed off on these bare-bones plans, even though they don't offer much financial protection from serious injuries and illnesses.

Obamacare includes extensive requirements for the coverage insurers will have to offer on exchanges for individuals, but it says little about what employers need to provide.

While most big companies offer thorough coverage, many retailers, restaurant chains, and hospitality companies do not, according to Politico. Many of their employees are part-time, low-paid, and receive little if any health insurance.

Now that the employer mandate has been delayed, U.S. businesses and politicians on both sides of the aisle want the definition of full-time workers to be raised from the 30-hour work week in Obamacare to the traditional 40 hours.

Rep. Todd Young, an Indiana Republican, is spearheading legislation in the House to do so, and the Senate already has approved an amendment to return to the 40-hour threshold

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