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"Employer Responsibility Provision" in the Affordable are Act

Employers have been terrified of the Patient Protection and Affordable Care Act ("Obamacare"), even though a big part of it won't be implemented until 2015. It's the shared employer responsibility provision which will require large employers, those having more than 50 full-time employees working at least 30 hours a week, to provide an adequate level of health insurance to its employees or else face a penalty.

Small businesses with less than 50 full-time employees, accounting for 96% of firms in the United States, are specifically exempted by the Act. Furthermore, employers won't be required to provide coverage for part-time or seasonal employees. Essentially, the provision won't apply to the vast majority of employers.

Concerned that taxpayers would have to bear the cost of health care coverage for lower income workers because of non-existent or limited or limited health insurance offered by larger employers, Congress declared a penalty against any large business whose failure to provide adequate and affordable insurance could ultimately force its employees to take a "free ride" at taxpayer expense.

There are two scenarios for which a large employer may be penalized; first, if the employer fails to offer coverage to its employees; and, second, if the employer doesn't offer enough coverage that is affordable for all its workers. However, the penalty is not automatic. It is triggered only if an employee is later granted a federal tax credit to buy health insurance. Because of this, employers may be less inclined to hire workers who are more likely to qualify for subsidies. Whatever its limitations, the shared employer responsibility provision signals Congress' intent to get a handle on our current health care system. After all, Congress has the power to adopt and change the laws in our country and, hopefully, it will do so for the benefit of the American people.


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