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Employers can control health care costs with alternative approaches

Businesses are only subject to federal penalties if workers receive tax credits for government-run health care exchanges

Employers concerned about their obligations under the Affordable Care Act (ACA) should consider alternative approaches that may exempt them from providing health insurance to all employees, according to Charles Wachsstock, an employee benefits attorney at Debevoise & Plimpton.

In a webcast sponsored by the Practising Law Institute, Wachsstock noted that employers that do not provide health coverage only incur government penalties if an employee gets a tax credit for purchasing insurance on a government health care exchange, Thomson Reuters reports.

Not all employees are eligible for said credit, however. Only workers whose salary is four times the federal poverty credit or less—$45,960 for an employee without a family—qualify for the exchange credit. Thus, businesses looking to trim health care costs—and avoid government fines for noncompliance—can do so by not providing insurance coverage for workers who make more than that amount.*

Wachsstock also noted that employees and their families may get better insurance rates on government-run exchanges if they do not receive coverage from an employer.

*Correction: The article originally stated that companies looking to trim health care costs could do so by not providing insurance coverage to workers who earn less than the threshold amount.

For more InsideCounsel coverage of the health care industry, see:

Birth control exemptions fail to stop lawsuits

Health care fraud probe pays off: U.S. recovers billions

Supreme Court sides with FTC in blocking hospital mergers

2nd Circuit decision throws FDA’s drug misbranding cases into question

Labor: 4 broad implications the ACA could have for collective bargaining

Cheat Sheet: What employers need to know about the Affordable Care Act

Alanna Byrne

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