UnitedHealth Group Inc. (UNH), WellPoint, Inc. (WLP): Play Or Pay

Obviously, if employers simply don’t offer insurance, it’s easy to figure out their liability. But the penalties can also apply even if an employer does offer insurance. If the insurance an employer provides is deemed to be unaffordable to the worker — defined as costing the worker more than 9.5% of household income — then that worker could receive tax credits to help pay for insurance coverage. That will trigger a penalty provision of $3,000 per subsidized worker, although the amount can never be higher than if the employer didn’t offer insurance at all. More complex safe-harbor provisions may help employers avoid penalties in certain other situations. For more information, check out this list of questions and answers on employer responsibilities for Obamacare at the IRS website.

Play or pay
Figures from the Congressional Budget Office estimate that roughly 6 million people will choose to pay Obamacare’s penalties rather than obtaining health insurance. That bodes ill for health insurers UnitedHealth Group Inc. (NYSE:UNH), WellPoint, Inc. (NYSE:WLP), Humana Inc (NYSE:HUM), and their peers, all of which have relied on the effectiveness of the individual mandate to bring in new customers to offset higher costs that Obamacare imposes on them. Moreover, with penalty revenue expected to amount to $7 billion by 2016, the price Americans will pay for not complying with the individual mandate is far from insignificant in its own right.

The article How Much Will Obamacare’s Penalties Cost You? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends UnitedHealth Group and WellPoint and owns shares of WellPoint.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.