Where Will You Get Health Insurance in 2014?

US News

After years of legislative and constitutional debate and challenges, the centerpiece of the Affordable Care Act - the requirement that most American adults obtain health insurance - will become a reality in only a few months. By Oct. 1, the ACA requires that new state insurance exchanges be up and running to allow eligible individuals to apply for 2014 health insurance policies.

Right now, it's not clear that all the exchanges will be open for business or that they will have attracted enough participating health insurers to provide consumers with the kind of rate-lowering competition envisioned by the law's sponsors. Only a third of the states are setting up their own exchanges. For a variety of reasons, the rest are letting Uncle Sam do it for them.

[Read: The Real Obstacle of Health Insurance Exchanges: American Consumers.]

To be effective, the exchanges will depend on a powerful set of new online information tools that federal regulators are developing. These tools are supposed to provide an on-demand look at an individual's tax, income and other eligibility information. The purpose of this information is to inform eligible Americans whether they qualify to get insurance through an exchange, the size of any federal subsidies they are entitled to and how much they would pay for the various health plans available from their state's exchange.

Even if this number-crunching miracle is somehow pulled off, there's still the matter of communicating the law's requirements to consumers. Regulators are also gearing up for an 11th-hour marketing and publicity push, including recruiting people throughout the country to help consumers navigate the Affordable Care Act. Right now, opinion polls show large percentages of consumers still neither support nor understand the law.

Employers have traditionally provided most health insurance in the United States. President Barack Obama repeatedly has said that the ACA will be a non-event for most, if not nearly all, people who already have employer-provided insurance. But employers face so many decisions and possible penalties under the new law that it's not clear the president's statement will turn out to be accurate.

Employers certainly are expected to continue to be the primary provider of health insurance coverage in the U.S. But there may be many differences in their plans, including the features of the health insurance they offer, whether they will expand the ranks of part-time workers whom they don't have to cover and even the possibility of knowingly breaking the law and paying non-coverage penalties in order to save money.

Mercer, a subsidiary of Marsh & McLennan Companies that offers employee benefits services to employers, asked nearly 4,000 employers in May about how they would be affected by the Affordable Care Act and received about 900 completed surveys. Mercer concluded that employers are facing enormous uncertainties about the law's impact as well as widespread misunderstanding of what it requires of them.

"As we approach 2014, it's a bit concerning that 32 percent of employers know little about the actual cost impacts of the new changes," Mercer CEO Julio Portalatin said in a statement.

[Read: Employees Demanding More Retirement Help From Bosses.]

"While employers can calculate how many employees will be newly eligible for coverage, they can only guess how many will actually elect coverage," Mercer said in the statement. "All individuals are required to have health coverage in 2014, but because the tax penalty for not obtaining coverage insurance will be relatively low in 2014 - just $95 per individual or 1 percent of household income, whichever is greater - some employees may still choose to go bare."

Nearly a quarter of the employers surveyed have not yet figured out how to track and record the hours of employees with variable working hours, a requirement needed to verify that all employees working more than 30 hours a week are offered employer health coverage. Mercer says extending health insurance to all such employees will be the most disruptive adjustment that employers face in complying with the new law, especially in retail and food service companies that make heavy use of nontraditional work shifts.

"Some employers are attempting to protect themselves from big jumps in enrollment by raising employee contributions for coverage, particularly for dependents," Mercer said. "Nearly a third (30 percent) of respondents say they will require a bigger paycheck deduction for dependent coverage next year, and 13 percent will raise the contribution percentage for employee-only coverage."

[Read: Health Reform, Now Real, Is Just Around the Corner.]

Tracy Watts, who leads Mercer's health care reform consulting, said in an interview that she has heard three leading business concerns about the law:

1. The ACA imposes new health insurance fees that many employers have not focused on but could raise their costs by two to three percentage points in 2014.

2. On average, about 18 percent of employees are offered health insurance every year, but decline it, Watts says. Some may have coverage through their spouse's plan. Some may be 26 years old or younger and covered on their parent's plan. And some, particularly younger employees, may just forego coverage altogether. Employers don't really know how many of these employers will now accept coverage and thus how their plan participation and expenses will change next year.

3. The most expensive health plans, known informally as "Cadillac plans," may trigger a stiff excise tax for employers in 2018. Watts says nearly a third of employers surveyed responded that they are already taking steps in 2014 to begin reducing participation in such plans, both by offering lower-cost alternatives and by reducing the features and costs in the plans themselves. "From the day this law was passed in 2010," Watts says, "the No. 1 concern of employers has been that excise tax in 2018."



More From US News & World Report

Rates

View Comments (210)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • Master's Degree in Nursing

    CCNE accredited MS in nursing in as few as 18 months online. Learn more today!

    AdChoicesNorwich UniversitySponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Don't care about Alibaba? Here's why it may matter

    When the Alibaba Group Holding prices its initial public offering Thursday, small businesses in particular will be watching. Founder Jack Ma -the former English-teacher-turned-dot-com billionaire-has touted his e-commerce platform as a way for smaller merchants to expand their international…

    CNBC
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • Wondering How You Could Save on Home Insurance?

    Get a quote from Farmers Insurance and discover how you could save. Speak with an agent to get the knowledge you need to make an informed decision.

    AdChoicesFarmers InsuranceSponsored
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Play

    Tues., Sept. 16: Watch Humana Stock

    Humana, Global X Social Media Index ETF and Majesco Entertainment are among stocks to watch. WSJ's Chris Dieterich discusses the details with Michael Casey. Photo: Humana

    WSJ Live
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider
  • Take Your Career in Law to the Next Level!

    Earn an accredited Master of Laws in only 1 year. 100% online, No LSAT required, and 5 concentrations offered, including Taxation Law. Apply today!

    AdChoicesThomas Jefferson Law Sponsored
  • Don't buy Alibaba stock: 'Dean of Valuation'

    Investors should steer clear of Alibaba , valuation expert Aswath Damodaran said Wednesday. On CNBC's " Fast Money ," Damodaran, a professor of finance at New York University's Stern School of Business, noted that he was looking at Alibaba stock from the perspective of a long-term investor, not a…

    CNBC