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Design health plan to attract low-wage workers

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in Compensation and Benefits,Human Resources

With data showing how employee income and health-benefit plan participation are closely intertwined, a new study is sounding alarm bells for employers that must begin complying with the affordability mandates of the Affordable Care Act (ACA) health care reform law next year.

The ADP Research Institute warns that many low-wage employees may opt to remain uninsured because they perceive that premiums will eat up too significant a percentage of their annual income.

The institute found that 81% of employees with W-2 wages greater than 400% of the federal poverty level (FPL)—roughly $45,000 for a single person under 2012 guidelines—consistently participate in health coverage. However, as income declines below 400% of the FPL, health plan participation rates decline sharply to just 37% for single employees earning between $15,000 and $20,000 per year.

The finding is significant because, starting in 2014, the ACA requires employers...(register to read more)

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