Health Care Reform Features Tax Credits For Businesses

by Cindy Crone, Arkansas Insurance Department  on Monday, Aug. 12, 2013 12:00 am  

Cindy Crone

Business owners have also been concerned about penalties set forth by the law (also delayed until 2015) and some people have feared that businesses would cut hours or numbers of employees so they would be exempt from the law and thereby avoid penalties.

However, only about 1 percent of businesses nationwide would be affected. The majority of businesses with 50 or more employees already provide insurance and, according to an analysis by CNN, Fortune and Money magazines, of the 6.5 million workplaces in the U.S., only about 71,000 should take action and provide insurance for employees by Jan. 1, 2015.

How ‘Private Option’ Helps

Arkansas is the first state to pursue what has been called the “Private Option,” an innovative and unique approach to expanding private insurance coverage for low-income Arkansans.

The Private Option (more formally known as the Arkansas Health Care Independence Act) expands Medicaid eligibility, allowing more people to access healthcare, which was a goal of the ACA.

The Private Option means growth for Arkansas business in multiple ways.

For one, it improves businesses’ standing under the ACA. If workers are eligible for private insurance plans through the Private Option, there is no obligation for businesses to offer those employees health plans through the business — and that saves businesses money.

Furthermore, this expanded market will be more lucrative for health care providers than it would have been without the Private Option. Reimbursements to providers are higher in private health insurance plans than under traditional Medicaid. Doctors, hospitals and others involved in health care will all benefit.

Health Insurance Marketplace Plans

Insurance plans will be available through the Health Insurance Marketplace on Oct. 1 and will be ranked on a tiered system similar to Olympic medals: Bronze, Silver, Gold plus Platinum. The plans must cover essential health benefits.

The plans differ in cost based on the share the patient wants to pay for health care in addition to premiums. For example, a Bronze plan on average covers 60 percent of the cost of the essential health benefits, while the patient pays 40 percent. By comparison, the Platinum plan on average covers 90 percent of the cost, leaving the patient to pay 10 percent.

The 10 Essential Health Benefits



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