The continued implementation of the Affordable Care Act (ACA) marks significant change for the American healthcare system that will have ramifications in the economy for many years to come. This wide sweeping piece of legislation continues to change the rules for all businesses, large and small, and will affect you as a business owner. Here are some of the major changes at a glance for small business owners to consider.
Important Changes To Be Aware Of
According to the Employer Shared Responsibility Provision all companies with 100 or more full-time (FT) employees in 2015 will have to provide health coverage within the guidelines of the ACA. Beginning in 2016 all companies with more than 50 FT employees will be mandated to provide affordable healthcare to their employees or suffer financial penalties.
This is important to small businesses because companies with fewer than 50 (FT) employees are not mandated to provide healthcare to employees. However now that this act has been implemented the norm in America will likely become that it is the employer’s responsibility, regardless of size, to provide healthcare. This would replace the old assumption that it is the employee’s responsibility to find a provider for a plan that they can afford. Although the concept of having a company healthcare plan is by no means new, it is evolving.
For small business owners this will mean that they are going to have to offer some kind of healthcare in order to make their employment benefits competitive with those of large employers. Additionally group plans offered by the company will have to meet the rules and regulations set by the ACA (such as nondiscrimination over pre-existing conditions and unlimited coverage by employer plans). Healthcare in any capacity is an expensive process, and becoming so as America ages and more people compete over tax based funding.
In order to incentivize small businesses to offer their employees’ health benefits the bill provides tax credits for small business owners with less than 25 FT employees (whose annual wages fall within a certain amount of income parameters). This tax credit will help the owners compensate for the cost of offering care by matching up to 50% of the employer’s contribution. This rule helps to further the goal of the ACA as a whole in insuring that all American tax-payers, in both large and small companies, receive affordable coverage. As a small business you should consider this credit and how it can help both you and your employees. These credits can be claimed via the Small Business Health Options Program (SHOP).
The Affordable Care Act insures coverage for all FT employees. Additionally, the ACA changed the number of hours that set the difference between full and part-time employment. As this changes the cost structure to your business, it is important to carefully plan on how you intend to staff. Now it is more important than ever to assess how much value you are getting out of each position and whether or not that position truly needs to be full-time. Some companies, such as large retailers, have reacted to this by slashing staffing hours across the board in order to make their payroll and benefits less costly. Clearly this is not ideal for every business and does not necessarily mean it is the best strategy for your small business, but it is a choice you may have to make.
You will need to choose a plan that covers your employees, keeps your business within regulations, and makes sense considering the financial situation of your business. Every business’s situation is unique, speak with an attorney today about the care plans that best fit you and your small business.
Discover More About The ACA
Content Provided By Jeana Goosmann, CEO and Managing Partner of the Goosmann Law Firm
For more information about health law and the ACA, contact the Goosman Law Firm at firstname.lastname@example.org or call 712-226-4000.