Small Businesses and the Affordable Care Act

Small bizWith the cost of providing health insurance benefits on the rise, many small business owners are finding it difficult to provide adequate coverage for their employees. Some small business owners only have the ability to offer insurance with high deductibles while others have resorted to sending employees to exchanges to purchase their own policies.

The main concern with the Affordable Care Act has been whether people can find health coverage they can afford online. The law was also supposed to create a bigger and better market place for small businesses by granting tax credits to companies that provided coverage to employees as well as assist companies in their search for low-cost plans.

According to federal officials, they don’t know exactly how many small businesses are signed up for coverage, but there appears to be more individuals enrolled than small businesses. Not many businesses have taken advantage of the tax credit provided for purchasing coverage for workers with lower wages. According to Linda J. Bloomberg, a policy expert at the Urban Institute, the program is off to a slow start since most officials were focused on individual marketplaces and not small businesses.

Experts are hopeful that the Small Business Health Options Program will work, and others suggest that it will take years if it does succeed. Some insurers and brokers still see ACA as a threat to existing business.

Federal officials are working on making small business market places work. Technical problems with the online enrollment will be fixed, and five states are allowing early access to the online marketplace for businesses. Officials are also working more closely with brokers because more insurers may be offering coverage in 2015.

According to a survey by the Kaiser Family Foundation, only 44 percent of employers with three to nine workers offer coverage. That percentage is down from 52% a decade ago. Businesses who employ less than 50 people are not required to provide coverage, unlike larger employers. Larger companies usually pay a large percentage of the workers’ share of the premiums, but 14 percent of businesses with less than 20 employees don’t pay anything. A lot of small-business employers ignored the entire new healthcare act for 2014.

According to some insurance companies and brokers, many small businesses have re-enrolled their workers into existing insurance plans. Some of the plans did not comply with the new rules while other small businesses sent employees to individual marketplaces, which some critics say are not in compliance with the law.

Some small businesses, however, have benefited from ACA. Some companies, for example, have saved thousands going through the exchanges. Other small employers are less impressed with the law and exchange markets. Some of those who take advantage of the new law are still worried about the future because they don’t know how long they will be able to pay for the health coverage when their tax credit expires in two years.