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There are a lot of long explanations out there. A lot of misconceptions. A lot of fear. A lot of incorrect assumptions. Kinda funny, reminds me of the tax code! Well, Obamacare is here to stay – it is reality. Deal with it.

No, I don’t particularly care for it, in case you are wondering. Well, I hate paying taxes too – but do my best to take advantage of the tax code as best I can to minimize the impact on my financial position. So, stop reading political banter about Obamacare and prepare to understand it and deal with it — start planning!

Obamacare is no doubt the biggest change ever in our healthcare system. On October 1, a health insurance “exchange,” or marketplace, will open for business in every state, selling plans that begin on January 1, 2014. That happens to be the date by which almost all Americans will be required to have health insurance or else pay a fine. That sounds simple, but the devil is in the details!

Question: I don’t make a lot of money, and we struggle to make ends meet. My employer doesn’t provide health insurance, and I barely make it through the month as is. There is no way I can afford to pay the fine, let alone healthcare premiums.

Answer: Your concerns are valid, but it’s probably not time to panic just yet. Obamacare provides certain subsidies for low income households. To get a rough idea of what you may have to pay in 2014, go to http://healthreform.kff.org/SubsidyCalculator/. For example, for someone single, age 40, and making about $35,000 per year, a subsidy of about $100 per month would be paid directly to the health plan provider of that person’s choice. Of course, you will need to see how much you can afford after that, and there will be different plans (at different costs) available. Yes, you will need to get health insurance, but it may not be as bad as you think.

Time to go back to the family budget – and try to speak to your employer about giving you just a small raise, a small part of the cost to help with health insurance – maybe $100 per month? You may be surprised at their willingness to help if you show your desire to be responsible yet are just looking for partial help. Add that money to your government subsidy. Maybe it won’t be so bad. And, at the end of the day, you really should have health insurance. It’s generally not a good practice to be uninsured. So keep that in mind as well.

Question: I’m on Medicare. Do I have to buy additional health insurance?

Answer: Nope.

Question: I am employed by a small business. My employer tells me they will have to soon pay $1,800 per employee because of Obamacare, and thus, they can’t afford to give pay raises and may even need to cut our pay or hours. We don’t get health insurance right now. Is all this true?

Answer: That depends. If your company has 50 or more full-time employees, that could very well be an accurate statement. If less than 50, then your employer is either telling you a fib, or they just don’t understand the new laws. Any business with less than 50 full-time employees has no obligation whatsoever under the law to provide insurance for their employees.

Question: I hear a lot of CEOs claiming that Obamacare will force them to reduce employees’ hours due to the cost of insuring them. Aren’t large employers already obligated to provide health insurance to full-time employees?

Answer: No. Health insurance is provided by large employers as a benefit to its employees and as part of them offering a competitive compensation plan in the marketplace to attract and retain quality people. Starting in 2014, this becomes mandatory, not a choice. These companies will have to choose between providing health insurance for all full-time employees or pay fines. Will there be some impact to employees’ hours? Almost certainly. So keep yourself valuable and work hard! However, I also suspect that any practices that become clearly abusive will be dealt with accordingly.

Question: I heard that Obamacare would take cancer care away from individuals 77 years old and higher. Is that true?

Answer: No. And stop relying on internet blogs (except the Credo blog, of course) for your news.

Question: Why does Obamacare cover people who are not legal U.S. residents? This is so infuriating!

Answer: It doesn’t. “Individuals who are not lawfully present in the United States” are specifically excluded.

Question: So why wouldn’t a large company just pay a fine and not provide health insurance? Especially if the fine is cheaper than the insurance – how does that help anyone?

Answer: Yeah, grab a bucket of popcorn and let’s watch. Should be interesting.


Dan Lucas, CPA/ABV

Managing Director, Credo Financial Services, LLC



Dan Lucas
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