Health Insurance Business | What Is in Store for Small Businesses?
The Affordable Care Act of 2010 has already changed the health insurance industry in many ways, but many of the Act's major reforms will not take effect until January 1, 2014. Given all the buzz surrounding the new law, you may have heard conflicting accounts and dire warnings about these coming changes. And with a law that contains 22,000 pages of regulation, it’s no wonder businesses big and small are confused and worried about their future insurance plans.
The key is in understanding how the law affects your specific small business.
Many small businesses simply cannot afford to offer health insurance to their employees. According to the US government, small businesses with fewer than 100 employees pay on average 18% more in health insurance costs than larger businesses.
96% of all American businesses have fewer than 50 employees, and the Affordable Care Act specifically exempts those firms from employer responsibility requirements. However, a small business in the United States constitutes any business with fewer than 500 employees. Businesses with over 50 employees that already offer health insurance may be able to grandfather their plans, but they will be restricted from charging more than 9.5% from their employees to go towards their insurance coverage. Thus, employers will have to cover about 90% of their employees’ health insurance costs. To help you meet the cost, the Small Business Healthcare Tax Credit will expand in 2014, covering up to 50% of your contribution toward covering low-to moderate-wage workers. Businesses with over 50 employees who do not offer health insurance must purchase their plan through the government run state pools.
Health Insurance Business and SHOP
Beginning in 2014, the Small Business Health Options Program (SHOP) is scheduled to open its doors, though recent accounts reveal they are behind schedule. Designed to be a simple and convenient online marketplace where you can compare prices on private healthcare policies, it is unclear on whether these plans offer more options. Many argue that they are actually more limited and one-size-fits-all, given the massive regulations they entail. Plans purchased through SHOP will set deductibles at a maximum of $2,000, which, along with other restrictions placed on employers, will make SHOP plans more expensive. On the other hand, if you have older workers or employees with high premiums because of a pre-existing condition, new consumer protections could lower their premiums.
EINSURANCE answers your questions about how the Affordable Care Act will affect your small business. Visit our Website today for more information and a free insurance quote.