Health Insurance May Become Unaffordable for Low-Wage Workers

The Affordable Care Act may be a misnomer for some working-class people.

It simultaneously requires people to acquire health insurance or pay a penalty next year, and large companies to provide an affordable option for their workers. But there are some unintended gaps in the law that people with low incomes may not be able to bridge, The Associated Press says:

The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee’s income. Failure to do so means fines for the employer.

But do the math from the worker’s side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 [a year] and the insurance would still be considered affordable.

And that’s before any health insurance deductible, which could be as high as $3,000 a year, the AP says.

Workers with an affordable employer option won’t be eligible for tax credits designed to help low-income people afford premiums when they buy insurance themselves, the AP says.

Given all that, it’s possible that large employers could come up with health insurance plans that meet the requirements of the law but still cost too much for low-wage employees.

Or maybe not. National Retail Federation health care expert Neil Trautwein told the AP there is no “grand scheme to avoid responsibility” among employers to meet the letter, but not the spirit, of Obamacare.

Perhaps big companies that pay low wages will make sure the health insurance they offer employees is truly affordable. How do you think this will pan out? Share your thoughts on our Facebook page.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,018 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • Raymond Michael Borland

    Government run medicine will cost much more than private insurance. Doctors and hospitals charge large fees that are routinely adjusted downward by the insurance companies, thus saving the insured person a lot of money. The BCBS network was set up as a non-profit by the way. Other insurance companies do not make the exorbitant profit returns that you imply, Sophie. I am sure you are aware that music CDs return hundreds of millions of dollars to a rock singer yet no one complains. The return in profits to Apple for your computer or iPad is far larger than the usual 4-6% profit that health insurance companies make. If you take one vacation in a year you probably spend more for that than for health insurance. What is more important? Health care IF you need it , or a vacation?