Starting on October 1, 2013,  people without health care insurance — including most caregivers in private duty home care — will be able to shop through the new health care marketplace to compare prices and plans and get coverage.  With open enrollment less than a month away, this is a great opportunity to review some of the key components of the Affordable Care Act and the health care marketplace that are important to know before October 1.

Those caregivers who elect not to purchase health care insurance, and who do not have insurance through their employer or their spouse’s employer, will have to pay a fee to the federal government. The fee in 2014 is 1% of your yearly income or $95 per person for the year, whichever is higher. The fee increases every year. In 2016 it is 2.5% of income or $695 per person, whichever is higher.

A caregiver who works 35 hours per week at $10.00 per hour will have to pay a fee of 1% of their wages, or about $182.00. It’s important to remember that someone who pays the fee won’t get any health insurance coverage. They will still be responsible for 100% of the cost of their medical care. After open enrollment ends on March 31, 2014, they won’t be able to get health coverage through the Marketplace until the next annual enrollment period, unless they have a qualifying life event.

Home Care companies that employ more than 50 full time equivalent employees will have to provide health care coverage for their caregivers beginning in 2015, or pay a penalty. That will apply to all caregivers who work 30 hours a week or more.

Strategies to Avoid the Penalty

As the implementation of the Accountable Care Act provisions for employees comes closer we hear many strategies being discussed by owners of home care companies.  Among the more commonly discussed ideas are:

• Keep your company small – under 50 FTEs
• Keep your caregivers under 30 hours per week
• Pay the penalty
• Provide insurance
• Lay off all your caregivers and become a registry with independent contractors

There’s no easy solution, and many home care company owners have not taken time to fully understand the new law and how it will affect their business.  As we move toward the January 1, 2015 deadline for providing insurance for caregivers we’ll keep you informed about what’s happening and how home care companies are responding.

What do you think?  What will your approach be?