Health Insurance May Become Unaffordable for Low-Wage Workers

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Many low-wage earners will be offered health insurance through their workplace next year, but it might be more than many can reasonably afford.

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.

Stacy Johnson

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