Millennials Continue to Reject Obamacare In Favor of Tax Penalties?

millennials refusing obamacare dewitt riskThe media seems to find something new to say about the Millennials everyday. (And the general public seems to find the energy to chuckle at the new Millennial jokes everyday – even the Millennials themselves get a good laugh). The be honest, there are some really funny ones floating around out there. The memes and gifs can give you a stitch in your side. And the musical parodies are on par. (So much so that I can’t resist giving you a link to a recent favorite around here). If that doesn’t at least make you smile in exasperation, I don’t know what will. Then there are the bits and pieces of Millennial news that aren’t as funny; like the Obamacare issue.

Interesting fact: Younger people (those dang Millennials…yah, you know who you are) are still avoiding purchasing Affordable Care Act (ACA) compliant plans. In other words, Millennials are still rejecting Obamacare – seemingly in favor of the tax penalties.

What is Making Millennials Accept All Those Tax Penalties When They Could Just Sign Up for ACA Compliant Plans

This unexpected trend has been holding steady since the ACA passed. It was expected that the first people to enroll would be those who were in need of the most care – or the most immediate care. That, of course, went as planned. Yet in order for the program to work, the younger and healthier people would need to start signing up shortly thereafter. This step was a vital part of the overall success of the Act since it would balance out the costs.

Yet younger and healthier peeps (a.k.a. Millennials) simply aren’t enrolling as officials expected. (Way to do exactly the opposite of what people predicted in the belief that you’re bulletproof). Due to the lack of healthier, younger enrollees, healthcare insurance companies are experiencing financial losses.

Some may be tempted to chalk the refusal to comply up to a rebellious streak in this particular generation, but Millennials are actually citing cost and ignorance as the reasons behind their actions (or non-actions, in this case). This explanation is supported by the contradictory facts that while they aren’t willing to accept Obamacare, they are willing to pay tax penalties for not signing up! It’s like my grandmother’s favorite saying, “If you don’t have time to do it right the first time, how are you going to have time to do it over?” Except in this case, it’s in reference t money, “If you don’t have enough money to pay your insurance premium, how are you going to have enough money to pay the tax penalties?”

So basically…young, healthy people aren’t signing up for Obamacare because they can’t afford another “bill,” but in doing so they are willingly accepting the fact that they will be subject to tax penalties. There’s a pretty big hole in this logic – some would call it ignorance, but then, this stuff can be confusing. And it’s particularly confusing for this age bracket that has little to no basic health insurance knowledge. It’s really not shocking that it can be a struggle to understand what’s going on; to know which plan is the most financially beneficial.

To be fair, Millennials are participating in the healthcare initiative, but they’re far less than enthusiastic. The level of enthusiasm would be better described as grudging participation. Recent studies suggest that 62% of people feel their health insurance premiums are too high and that they can’t afford to pay them. 73% say their annual deductibles are too high. 27% of Millennials have no health insurance coverage and are currently opting to pay penalties instead.

Let’s consider a few of the major issues that make Millennials hate talk of the health insurance industry:
  • Fear of High Prices
  • Poor Health Insurance Literacy (What is a deductible? A premium? Coinsurance?)
  • Many, Confusing Choices
  • They Still Feel Bulletproof
  • Beliefs that Penalties Are Cheaper Than Coverage (While Penalties Continue to Increase)
At DeWitt Risk Management – we acknowledge that the struggle is real. But at the same time, (and we’re going to sound like your favorite, annoying teacher here) Millennials are our future. So we take the responsibility to explain complicated policies and terminology seriously. We can’t accept that America’s workforce is simply left at risk and unable to take care of their own healthcare and insurance needs. But then…that’s what we’re here for. It may surprise all the Millennials out there, but finding affordable care that is actually affordable for the young and healthy is really possible. And it’s our specialty.
In fact, we’ll just get right to the point of this entire discussion without further messing around – there is a solution to every “issue” listed above and the solution is DeWitt Risk Management. Get in touch. You don’t need to know everything about the healthcare and health insurance industries to get the best prices on the best coverage. That’s what we’re here for!
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Wiggle Room for Small Group Tax Credit Users

Does being a small business give you extra wiggle room? If you are a user of the small employer health insurance tax credit, you could get some extra wiggle room for upcoming healthcare reform deadlines. Some users will be able to take advantage of extra time to start buying coverage through the exchanges.

A new draft regulation from the IRS (Internal Revenue Service) attempts to provide employer tax credit users with a bit more flexibility. If you are an employer with 25 or less “full time” (and modestly paid) employees, you could benefit from the draft regulation.

The Basics:

1. The Patient Protection and Affordable Care Act created a health insurance subsidy for employers through the addition of a tax credit provision (Section 45R) to the Internal Revenue Code.

2. When the PPACA Small Business Health Options Program exchanges open, employers falling into this category can use the SHOP plan to qualify for the tax credit.

3. If you are an employer that meets the basic qualifications, but your plan years and taxable year start on different dates, it may not be possible to take advantage of the “SHOP” exchange at the start of the first taxable year starting in 2014.

4. The transition rules would help employers in this situation by enabling them to wait until the first day of its first plan year in 2014 to begin offering SHOP coverage (instead of the first taxable year).

5. In this case, the IRS would treat the employer as if they had offered SHOP coverage for the entire taxable year (2014).

Sometimes the little guys do get a little bit of a head start. Don’t ignore the chance to maximize your company’s options during these times of change.

If you have questions on eligibility requirements, how upcoming healthcare reform changes will affect you and your company’s benefits, etc. please get in touch today. DeWitt Risk Management Consultants can provide you with expert answers at 480-969-0202.