By Terry Baynes
Feb 22 (Reuters) - Under the Affordable Care Act, employers
only have to provide health insurance to some of their
employees, said lawyer Charles Wachsstock in a webcast sponsored
by the Practising Law Institute on Thursday.
Many employers may think that they will have to offer
insurance to all of their employees or face penalties under the
new healthcare law, but that's not the case, according to
Wachsstock, who discussed the issue in a continuing legal
education seminar, "Health Care Reform: An Employer's Essential
During the online talk, Wachsstock, an employee benefits
lawyer at Debevoise & Plimpton, presented some innovative
approaches that employers and their legal advisors are
considering for complying with healthcare reform and controlling
One option for employers who do not currently provide health
insurance to their employees is to analyze their obligations
based on employee income, according to the presentation.
Under the new law, the employer penalty is only triggered if
an employee receives a tax credit for buying insurance on a
government-run exchange. But only people who earn four times the
federal poverty level or less qualify for that tax credit. As a
result, employers only have to provide coverage for employees
who earn up to that amount to avoid penalties, said Wachsstock.
For a single employee without a family, that cutoff would be
an annual income of $45,960, according to one slide in the
presentation. Employers can refuse to cover single workers who
earn more than that amount without incurring the penalty.
Wachsstock also noted what he called a "mind-boggling"
dynamic in the law. Under the employer mandate, employers can
charge employees up to 9.5 percent of their household income for
health insurance coverage. Under the individual mandate,
however, employees don't have to buy health insurance through
their employer if it costs more than 8 percent of their
Instead, the employee may try to buy insurance on a
government-run exchange. However, the employee won't be eligible
for the tax credit for buying insurance on the exchange because
employer coverage is an option.
The employee and his or her family may get a better deal on
health insurance through an exchange if they are not offered
coverage through an employer.
(The original version of this story misspelled Charles
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