YOU ASK:

Can an employer deny an employee health insurance?

WE ANSWER:

By the time the health insurance reform law fully kicks in, it will be more cost effective for an employer to offer health insurance. You see, businesses that have more than 50 employees are mandated to offer health insurance to their employees. Otherwise, they will be charged with heavy penalties.

This is how it goes: If a business has more than 50 full-time employees and it does not provide these employees with health insurance as part of their fringe benefits, the business may face stiff fines - a whopping $2,000 for each employee exceeding the first 30 employees. This will happen if at least one of the employees in the business applies for (and gets) a federal government subsidy in order for him to buy health insurance.

You see, employees can apply for subsidies and may be granted tax credits or tax-funded health assistance. The fine is deemed the employer's "payment" for his failure to offer insurance and thus resulting in more expenses for the government by way of the subsidies. This regulation will be effective starting on January 2014.

Also, the employer will be required to issue "free choice vouchers" to their employees who opt to not be covered under the employer-sponsored group health insurance plan. This means that the employer should still be on hand to help employees who don't sign up for the employer-sponsored plans to get insurance through the individual market.

Smaller businesses (those with 50 or less employees) should not be worried about this provision, as they are exempted from it. In fact, these small businesses will be provided with tax credits to help them in providing coverage for their employees, if they choose to do so.

So, yes, an employer can opt to deny employee health insurance but it would cost more to do so.

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