Are some low-income workers with families likely to receive less than expected health care tax credits under Obamacare? Colorado State Senator Kevin Lundberg believes so.
On September 5, 2013, Connect for Health Colorado, the state’s new marketplace for health care insurance, held a meeting attended by the members of its legislative review and oversight committee. Among them, District 15 Senator Kevin Lundberg weighed in on a potential flaw in the health benefit exchange programs associated with Obamacare, a piece of legislation the senator has previously opposed. The program, signed into federal law on March 23, 2010 as the Patient Protection and Affordable Health Care Act, is slated for nationwide implementation at the beginning of 2014.
Prior to the New Year, however, another important Obamacare milestone is looming. This deadline is October 1, the day on which the U.S. Department of Health and Human Services has mandated that state insurance marketplaces such as Connect for Health Colorado—which, by all accounts, are to be the centerpieces of the legislation—should be made broadly available to the American public.
Lundberg, however, has vocalized his opposition to a flaw in the exchange program that could be financially detrimental to low-income workers with families. According to the Denver Business Journal,
The rule Lundberg, R-Berthoud, discussed is one that says that if an employer who offers insurance to a worker also offers insurance to the worker’s dependents—no matter what the cost of that dependent insurance—those family members are not eligible for federal tax credits if they decline employer-offered insurance and try to buy through the individual health exchange.
Federal health care tax credits are currently available to families whose combined household income is less than 400 percent of the federal poverty level. According to a recent article on Obamacare at PBS.org, this works out to a yearly income level of "about $46,000 for an individual or about $78,000 for a family of three." (PBS.org, "Will You Qualify for an Obamacare Subsidy")
At the meeting, Lundberg expressed these concerns to the executive director of Connect for Health Colorado, Patty Fontneau, asking her, “Why isn’t this on the front page of the paper every day,” adding, that “we’re doing everything we can to get rid of this rule that has a perverse effect on the families of low-income workers?” The Affordable Care Act limits employers to charging their workers a maximum of 9.5 percent of their yearly salary for insurance, but makes no provisions regarding what can be charged to cover the members of workers’ family.
Fontneau acknowledged the dilemma that many businesses will face on this matter, especially those small businesses with 50 or fewer employees that may decide whether or not to cover their workers’ insurance costs under the new Obamacare guidelines. Reassuring the committee, Fontneau explained that the trained brokers of Connect for Health Colorado will competently assist small businesses and the estimated quarter of a million individuals expected to use the service during its first year.
Lundberg’s critique of the plan, nevertheless, calls attention to a flaw in its implementation with potentially deleterious effects for working families, as well as to a legislative loophole that could very well elicit the future attention of the courts. Meanwhile, though confusion regarding the new health care law still prevails, federal and state governments have made resources available to help educate the public. For residents of Colorado, the best first step will likely be a visit to Connect for Health Colorado, a site devoted to linking residents of the state with a number of private insurers and available plans. Further up-to-date information about the Affordable Health Care Act is also available at https://www.healthcare.gov.