Thursday, July 1, 2010

Health Care Reform Q&A With the VSCPA Insurance Center: Employee Free Choice Voucher

Question: What is the Employee Free Choice Voucher, and how will it work?

Answer: Here is a detailed summary of the Employee Free Choice Voucher and how it will be administered:

Employee has a household income less than 400% of the Federal Poverty Level (FPL) (i.e. family of four with an income of $88k).

Employer pays 100% of individual premium and 0% for dependents.

Employer must offer a free choice voucher if the employee’s contribution to the health care premium falls between 8-9.8% (9.8% could change to 9.5%) and the employee does not enroll in the company’s health plan.

The voucher must be for the amount the employer would have paid toward the employee’s health plan had he/she enrolled in the company plan.

Employee premium = $300 a month

Family premium = $1,000 month

Employee enrolls in family category

Employee’s cost = $700 month ($1,000-$300) / $8,400 a year

$8,400/$88,000 = 9.5% so the employer must offer a free choice voucher to the employee

Voucher would total $3,600 for the year

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

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