Q&A: How Insurance Will Change Under the Senate Bill

Here are some questions and answers on how the Senate bill would work if it became law:

For consumers:

Q: Would the law force me to buy health insurance?

A: Yes, for most people. Of course, if you already have insurance from your job or are on Medicare, that won’t be a problem for you. Others might have to turn to newly created “exchanges” to buy coverage.

Q: What if I refuse?

A: You’d face a fine. It would start at $95 a year in 2014 and rise to $750 a year by 2016, or as much as 2% of your income, capped at the value of a basic insurance plan.

Q: What if I can’t afford coverage?

A: You’re likely to qualify for subsidies. The new consumer insurance subsidies would mean that a family of four earning about $22,000 a year would pay no more than 2% of its income toward insurance premiums. That assistance would stretch on a sliding scale up to a family of four earning about $88,000 a year and cap its premiums at 9.8% of the family’s income. Medicaid would be available to a family of four earning up to about $29,000.

For employers:

Q: Under the bill, do I have to give my employees coverage?

A: Technically, there’s no requirement, but if you have more than 50 employees and don’t offer coverage, you’re likely to face penalties. Any employer that doesn’t offer affordable coverage and has an employee who gets a tax credit would face a fine of $750 per worker.

Q: What if I have fewer than 50 employees?

A: The penalties don’t apply to you.

Q: With premiums rising so quickly, what’s to stop small employers from dropping coverage?

A: Small employers would get help to encourage them to maintain health coverage. Starting next year, firms with a small number of workers and average wages of up to $25,000 a year would be eligible for tax credits equal to 35% of the company’s cost of their insurance. That help would phase out gradually for firms with more employees and higher wages.