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September 17, 2009
New Healthcare Bill Drops Requirement for Employers to Offer Insurance

U.S. Senator Max Baucus of Montana has proposed legislation that would require every U.S. citizen and legal resident to purchase healthcare insurance but wouldn't mandate that employers offer healthcare insurance.

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Other healthcare bills proposed in Congress this year have included a requirement for employers to offer healthcare insurance. Business groups oppose such a mandate.

Instead of requiring employers to offer healthcare coverage, Baucus's legislation ( America 's Healthy Future Act of 2009) would make employers that don't offer healthcare insurance pay a fee if their employees receive a tax credit for health insurance through a state exchange. The fee would apply to employers with more than 50 employees. The fee would be capped at $400 per employee who receives the tax credit for health insurance through a state exchange. The fee for not offering coverage would be effective January 1, 2013.

Under the legislation, all U.S. citizens and legal residents would be required to purchase healthcare coverage beginning in 2013. Exemptions from the requirement to have health coverage would be allowed for religious objections that are consistent with those allowed under Medicare, and for undocumented workers. An individual enrolled in a grandfathered plan would be deemed to have met the responsibility requirement.

Those who fail to purchase and maintain healthcare insurance would be subject to an excise tax. Under the legislation, if employers offer healthcare insurance and have 200 or more employees, they must automatically enroll employees into health insurance plans. Employees may opt out of employer coverage, however, if they are able to demonstrate that they have coverage from another source.

The legislation also included other significant provisions. For example, the legislation would allow national health plans, with uniform benefit packages that are offered across state lines. The plans must be compliant with the benefit levels and categories detailed in the legislation. The legislation would preempt state benefit mandates--thereby allowing these national plans to offer a single, uniform benefit package.


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