February 9th, 2013 – According to new estimates from the Congressional Budget Office about 7 million people will drop off of employer sponsored group health insurance when the Affordable Care Act comes into full swing in 2014. That number is expected to grow to 26 million people by 2016.
The CBO’s change in its forecast was due to last month’s changes in the tax laws as part of the “fiscal cliff” deal, which made the Bush tax cuts permanent for all but the wealthiest Americans.
It is expected that some employers with low-wage workforces may find it cheaper to withdraw health insurance coverage, even if they have to pay penalties. As a result, the CBO expects penalties to increase $13 billion to a total of $130 billion in the next decade.
Some lower-income Americans may find it to their advantage to drop off of employer sponsored group plans and get health insurance through the exchanges where they may qualify for a subsidy, if they make less than 4 times the federal poverty rate. Follow the link for questions about Colorado’s Health Insurance Exchange.
In related news, last week the Department of Labor announced that the requirement that employers provide notice to their employees of the existence of Exchanges is delayed until late summer or early fall of 2013.