All businesses who have approximately 50 full-time employees will be affected by the Affordable Care Act (ACA).
Two thoughts that small businesses may be thinking………
1) Some businesses are worried because the burden of healthcare would limit hiring, leave insufficient cash flow for operating costs and stunt growth.
2) Meanwhile, some businesses fought for this law, claiming that without Obamacare small businesses would lose existing benefits and be thrown back into the unsustainable system in place.
- If you’re self-employed and uninsured, you will be compelled to buy insurance. States can create a virtual market place — akin to Amazon or Travelocity — where consumers can purchase insurance. But, this will not be mandatory. Some states (like Florida) might opt out, in which case individuals will have to go directly to the insurance providers themselves.
- Companies with fewer than 50 employees do not have to provide insurance, but the new law will make it easier and cheaper if they do.
- Businesses with 50 or more employees must provide health insurance or pay a penalty. If the business fails to comply, the penalty is $2,000 for each full-time employee (with a 30-employee deduction.) Additionally, if the coverage offered is too expensive (defined as costing more than 9.5 percent of the employee’s household income), the penalty is $3,000 per employee who must buy insurance with a government subsidy. However, only 200,000 small businesses will be affected by these changes because over 96 percent of small businesses fall below the 50-employee threshold.
- Companies with up to 100 employees can benefit from the option of buying lower cost health insurance through employer-only exchanges, also set up by each state. This might also reduce costs for smaller firms if they add their employees to a much larger pool of insurance customers.
- Overall, the ACA brings a mixture of rules and benefits, but there is nothing to suggest that the healthcare shake up will hinder job creation and economic growth. In fact, it could inject order into the unruly medical marketplace if the administration explains benefits and requirements simply and clearly.
Rothwell can provide an option to help keep your full-time employee numbers down below 50…all the while keeping them happy and satisfied with payroll, benefits, and ability to claim expenses.