Wait till next year

Happy New Year? Not if you’re even remotely fond of your health care. The turn of the calendar to 2013 starts the countdown to the end of medical coverage as we know it. On Jan. 1, 2014, the Patient Protection and Affordable Care Act takes effect in all its tax-hiking, mandate-imposing, cost-increasing glory.

Businesses everywhere will spend the next several months deciding exactly how to best manage the burdens of Obama-Care going forward. Their employees could see new, higher out-of-pocket costs or be forced to seek health coverage somewhere else entirely. The tax increases of Washington’s “fiscal cliff” deal are a warm-up for what’s next.

Happy New Year, indeed.

Many provisions of the federal health care overhaul already have taken effect, from the end of lifetime coverage caps to the coverage of dependent children through age 26. A year from now, however, come the biggest weights: requirements that businesses with at least 50 employees provide employees with coverage or pay penalty taxes, and that individuals obtain coverage or pay a penalty tax.

The possible outcomes for workers and business owners are not favorable. Most business leaders expect companies, at a minimum, to impose higher costs on employees, from premiums to deductibles. (Already, businesses face a $63 per worker tax next year to help cover the costs of those with pre-existing conditions.) Some companies could elect to pay the penalty tax, give workers a subsidy and send them to state and federal exchanges to buy their own coverage, where they might qualify for a tax subsidy – or they might find their dollar buys fewer benefits than they had before.

Other industries, including restaurants and retail, have suggested they’ll shift more full-time workers to part-time schedules to avoid penalty taxes. ObamaCare requires that employees who work at least 30 hours must be covered.

One of the primary goals of ObamaCare is getting more people to pay into the health care system. It goes without saying that you can’t get more of something for less money. Rising demand for health care will mean rising costs. And as workers deal with the sting of those higher costs on both premiums and direct payments, they’ll probably also feel the pinch of higher costs in some industries to cover the health care bills of those workers.

And if Congress decides to make medical benefits taxable income? You’d better hold onto your wallet.

Happy New Year.