The administration recently put the mandate on hold for a year, but that hasn’t stopped the head-scratching among small firms. How much will the changes affect their bottom line? What about their future plans for hiring or expansion?
There is a lot of back and forth debate about the effects of the Affordable Care Act (ACA) on businesses big and small, but it likely will also have implications on an untold number of ones that haven’t even started yet.
If you are still struggling to understand the Affordable Care Act, relax. You have some extra time to figure out how to comply with it, thanks to the one-year reprieve the White House announced on July 2.
Like most small-business owners I’ve come across in the past couple of years, Scott Hauge is frustrated by the very nature of the Affordable Care Act and its implementation. He sees both good and bad parts of the law but prefers not to nitpick at the sections he doesn’t agree with.
So far, the news appears to be good for a large number of insurance buyers in certain states. Proposed rates published by 11 states are on average 10 percent to 18 percent lower than those projected by the Congressional Budget Office, according to Ralph Lindeman in Bloomberg BNA
Under the Affordable Care Act, if a company with 50 employees hopes to avoid the penalty in the so-called employer mandate, it is not enough to merely offer those workers health insurance. The insurance must be “affordable,” among other things, and the law is very specific about what affordable means: It means the employee’s share of the premium cannot exceed 9.5 percent of the employee’s household income.
Small businesses with fewer than 50 full-time employees — or the equivalent — as defined by the U.S. Affordable Care Act may wonder what they should do to prepare for employee open enrollment on the new healthcare exchanges this October.
Like many small business owners, you will need to do some research—and some math—to figure out whether there will be a potential for cost savings from the upcoming changes to the insurance market in the next six months, as major provisions of the Affordable Care Act are rolled out.
“We’re creating a culture of coverage,” Lujan said. “There is no mandate for small businesses to offer health insurance. There are no fines except for individuals. The employer penalty (for those with more than 50 employees) has been delayed to 2015.”