The premium or the fine? If this legislation passes, I can see this decision being debated. It looks like the proposed fines will be lower than the premiums.
Employee Coverage and Fines
The current health care legislation (HR 3200) levies fines on those companies that do not offer health coverage to their employees. This fine is capped at 8% of wages (section 313). The company is required to pay a minimum of 72.5% of the premium for individuals and 65% for families, note this requirement is based on the lowest cost plans that the employer offers (section 312b). Trust me, there will be an analysis for which option will cost less. In order to compete, companies will need to do this.
Now remember, what Obama said:
You can keep your coverage if you like it.
oops, that changed to:
“Nothing in this plan requires you to change.”
Nope, nothing requires the change. Pretty sneaky wording right there, wouldn’t you say.
Problem is, if you are an employee, it isn’t really your plan, the company signs the contract and then makes it available to you, as part of your benefits.
Individual Coverage and Fines
If there is no penalty in getting coverage with a pre-existing condition, why would a healthy person purchase coverage? Why not wait until they “need” it?
- the fine will most likely be less than the insurance premiums
- 2.5% of modified adjusted gross income (if I read the bill and tax code correctly–it is a mess)
- CBO reports on 9/22/09, that exchange premiums will range between 3% to 13.9% of your income
- insurance companies can not deny you for a pre-existing condition
- insurance companies can not penalize you with increased premiums
- insurance companies can not drop you
Here is the section from HR3200 with the “tax” penalty, when a person is without coverage any time during the year. Need to make a note to myself, it is not a fine, but a tax. This section updates the tax code to facilitate collection of the fines, Part VIII, subpart A, section 59B:
(a) Tax Imposed– In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of–
`(1) the taxpayer’s modified adjusted gross income for the taxable year, over
`(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer. (I looked this up–$1000)
What do you think? Looks like if this legislation passes, it will be just another failed policy. And just think, you get to add one more thing to your tax return. Can’t wait to get IRS involved with my health insurance.
Don’t forget about my last post with this statement by Obama:
Nobody considers that a tax increase
Gee, doesn’t it say right there TAX IMPOSED!