One of the most important and controversial parts of The Affordable Care Act (ACA) has been the “employer mandate.” The mandate essentially forces companies that have over 100 full-time employees or over 100 full-time equivalent (FTE) employees to provide health insurance for their workers. (“Full-time equivalent” is a certain number of part-times and equal full-times.) If employers refuse, these businesses will have to pay fines and penalties for their noncompliance.
The Affordable Care Act (ACA), also known as ObamaCare, requires that every American have health insurance. By mandating both sick and healthy people carry insurance, the government is exercising the primary theory of insurance, Pooling Risk.
This theory explains why it is necessary for everyone to have coverage. If people only purchased health insurance when they became sick, there would not be enough healthy individuals in the “pool” to dilute the adverse selection of unhealthy people. Therefore, premiums would go up and there would be no affordable plans available.
Open Enrollment for health insurance through one of the exchanges set up by the Patient Protection and Affordable Care Act (PPACA) (aka Obamacare) ended on March 31, 2014.
The requirement that all individuals carry insurance is the cornerstone of PPACA. It is rooted in the primary theory of insurance; that the premiums of the many will cover the losses of a few. If only sick people purchased insurance, the premiums would rise beyond affordability for the average person. Healthy young people traditionally opt out of buying insurance for many reasons:
On April 1, 2014, President Obama released numbers and praised the Affordable Care Act (ACA), indicating that 7.1 million people have signed up. But what do the numbers say? Over 6 million people lost their coverage by having policies canceled because they were not compliant with the ACA or insurance companies decided not to continue offering those policies. These individuals were being forced to purchase insurance in the exchange, or go elsewhere for their coverage.