The Affordable Care Act will take effect on 2014, but many small businesses are still wondering about how it affects them and what it will do to health costs. The Patient Protection and Affordable Care Act, which was passed by the U.S. Supreme Court in 2012, addresses healthcare problems in the United States, including the issues about insurance premium pricing that keeps on increasing while the number of companies providing such kind of insurance keeps on decreasing.
The cost of employer-provided healthcare benefits climbed 8 percent between 2010 and 2011. But, the number of companies that provides benefits plummeted over the past few years from 58 to 48 percent for companies with three to nine workers and from 77 to 71 percent for companies with 10 to 24 workers.
When the Affordable Care Act is fully implemented in 2014, small business owners can expect the following changes:
•Contribution requirements– Businesses with less than 50 employees are not required to provide insurance, while those with more than 50 employees will be required to pay 60 percent of the cost for the “minimal essential coverage” of an employee.
•Reasonably priced premiums for employees–Premiums for every worker must not exceed 9.5 percent of his or her household income.
•Penalties for non-compliance– Remember, if your small business has more than 49 workers who work full-time, you will be required to provide health insurance or pay a fine of $2000 to $3000 for every employee per year. You are only exempted from this if you employ 49 employees or less.
•Help available– A tax credit is available under the Small Business Health Options Program Exchange, which raises the maximum credit for employer-provided healthcare from 35 to 50 percent. However, these tax credits are limited to five years, and this limitation drops to two years after the exchanges are fully implemented.
Today, advocates of the Affordable Care Act believe that healthcare reform helps reduce overall insurance costs, as more U.S. citizens and residents sign up, while opponents argue that healthcare reform will only compel employers to pay while failing to boost the industry to make a difference.
Nevertheless, recent studies revealed that as the U.S. economy grows, workers may expect to either have a better pay or access to benefits. A report released by McKinsey & Company in 2011 revealed that even without a health insurance that is subsidized by the employer, 85 percent of respondents would want or continue to work for an employer. But, about 60 percent of those employees said that they would expect their salary to be higher to compensate for it. An employer can offset cost of insurance premiums by motivating his or her employees to keep their health in good condition. This is often easier for small businesses that have a small, supportive workforce. Also, a small business could pay a part of the cost of gym memberships or establish a wellness program in which employees can regularly receive training by a professional wellness coordinator.
By providing workers with these helpful choices, including flexible benefits plans that allow them to save pre-tax money for healthcare costs, a small-business owner can offer benefits that will surely keep workers happy and healthy. If you are not a benefits expert, you may consider hiring a consultant to help your employees determine their healthcare options, including showing them how to price medicines and procedures to get the best deals.
As the Affordable Care Act approaches, the voice of small business owners is still missing from the discussion of what happens next—at least, that is, the unmediated voices of small business owners. Proponents on both sides of the issue are always glad to find a small business owner who has a pre-existing viewpoint when a reporter calls.
Joshua Turner is a writer who creates informative articles in relation to business. In this article, she describes the affects of the Affordable Care Act and aims to encourage further study with a UC Bachelor of Health Information Management.