Health Reform: is not doing what we had hoped

A part of the Health-care reform Bill is a tax credit of up to 35 percent of insurance premiums paid for employee medical coverage.
sounds good ,but only if you have less than 25 employees with annual wages less than $25,000. The credit drops to 10% and ends
at wages over $50,000.

One company is considering asking his 15 employees to pay for their own insurance coverage. With business down by 20% he can not afford to pay the $71,000 yearly premiums for health insurances. His company isn’t eligible for the tax credit because he pays his workers over $50,000 yearly.

His options are, reduce employee salaries to less than $50,000 yearly, to receive a 10% tax credit, or drop insurance coverage and ask his employees to pay for their own coverage.

If you do the math you’ll find that both company and employees will be farther ahead if the employees pay their own insurance coverage.

So much for “if you like the insurance coverage you’ve got you can keep it”.

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