NEW YORK (MainStreet) A fine for being without health insurance under the Affordable Care Act isn't scheduled to take effect until 2014, but with glitches and loss of current plans, there is increasing concern for Obamacare's sanction on the uninsured. As a result, 51% of Americans supporting a one-year delay of the penalty, according to a new survey.
"It is in full force for individuals, but the penalty imposed on employers will not begin until 2015," said Steve Jackson, senior vice president of strategic development with PrimePay. "The only way to repeal this law is with a Senate vote but even then President Obama would also need to vote on it."
About 41% prefer that the uninsured fine be waived for consumers in 2014, as it already has been waived for businesses, according to a HealthPocket survey.
"Waiving the fine takes away motivation for business owners to promptly enroll and provide health insurance to employees," said Dan Flugrath, CPA, certified financial planner and principal with MBAF. "This will put an additional financial burden on health insurance companies, as they will see a drop in enrollment and drop in revenue. While this is good for businesses in that they will save on the expense of paying for health insurance, it will have a negative impact on the health insurance exchanges."
Although the Affordable Care Act was signed into law in 2010, many of the provisions have only recently been addressed and clarified. As a result of the tardiness, employers need more time to ensure that their plans and the way that they are communicated and administered conform to these new rules.
"What is unclear is whether Americans will have a more favorable view of the uninsured penalty after the federal exchange is operational," said Bruce Telkamp, HealthPocket CEO.
In July 2013, 12% supported the uninsured fine starting in 2014 and by October these supporters more than doubled to 28%. In both surveys, supporters of the uninsured fine were substantially outnumbered by those who would delay the fine in 2014.
"We suspect that the well-publicized technical problems encountered by the federal exchange account for the difference in public opinion we observed from July to October," Telkamp said.
About 21% want the fine to remain at the 2014 level of 1% of adjusted annual income and not rise to the higher levels that will be in effect by 2016.
"The penalty phase for individuals begins in 2014, so there would not be a tax imposed on the individual or employer for failure of not being covered under an insurance plan in 2013," Jackson told MainStreet.
For now, a temporary waiver gives consumers until March 31, 2014 to sign up for the exchanges without penalty.
"This deadline will probably be extended as the government itself is not prepared both technologically and economically for the start of the enrollment period, which is resulting in a delay in consumers signing up," Flugrath said. "Until the government is up to speed, we'll likely see the fee waived."
Individuals would pay the greater of 1% of adjusted annual income or $95 if uninsured.
By 2016, the fine will reach the greater of 2.5% of adjusted annual income or $695 with a family maximum of $2,085.
--Written by Juliette Fairley for MainStreet