Extra employer taxesEmployers will pay “premium tax credits” for low-income employees who purchase insurance on the federal exchange. The shared responsibility rule is projected to cost employers more in states that rejected the Medicaid expansion and whose employees are more apt to sign up for subsidized care otherwise covered by Medicaid.• Georgia employers are projected to have to pay $70 million to $106 million more a year• Tennessee employers are estimated to have to pay $48 million to $72 million more a year• Alabama employers are projected to pay an extra $31 million to $46 million more a yearSource: Jackson-Hewitt Tax Service
Employers in Tennessee, Georgia and Alabama will likely pay more than $150 million in new taxes annually because the states are not expanding their Medicaid program, according to a new study.
The new study released Wednesday by Jackson Hewitt estimates that not expanding Medicaid under the Affordable Care Act could cost employers nearly $1.5 billion each year in the 25 states that have not yet expanded Medicaid for adults.
The tax penalty is somewhat hidden in the language of the Affordable Care Act, said the study’s lead author Brian Haile, Jackson Hewitt’s senior vice president of health policy.
The Affordable Care Act was written under the assumption that all states would expand Medicaid, meaning that the state-backed health care program could cover people who earn up to 138 percent of the federal poverty level, instead of topping out at 100 percent of the federal poverty level. The federal poverty level is $11,490 per year for an individual.