The Patient Protection and Affordable Care Act (informally referred to as Obamacare) is going to be implemented at the beginning of 2014. The new laws will have a considerable impact on businesses throughout the country. Astute business owners are familiarizing themselves with the new law and developing a system that will be compliant when it goes into effect.
Here are some important pieces of information you should be aware of while you try to set a system in place.
Addressing the Employer Mandate
One of the biggest uncertainties for small business owners is the employer healthcare mandate. This piece of the legislation requires many employers to provide health care coverage that has been approved by the government. Many business owners are concerned that they are going to have to pay much higher health care costs under the new mandate.
The health care mandate requires all employers with over 50 full-time employees to provide health care. Under the new laws, anyone who is working more than 30 hours a week will be classified as full-time. Employers who meet this requirement but don’t provide health care will have to pay a fine of $2,000 for every employee.
Employers feel that they have the following options as they decide to address the health care bill:
· They can pay for insurance for all their employees. Employers who hold this perspective expect that many other employers are going to be providing healthcare to their employees and feel compelled to provide it as well. Otherwise, they risk losing their employees to other businesses that offer health care benefits.
· They can make sure that they have fewer than 50 full-time employees on staff so that they don’t have to provide health care coverage. A number of employers (such as Stryker Medical Devices) are already cutting their employees hours or laying employees off to
· They can pay the fine, which is expected to be lower than the cost of providing health care coverage.
Employers with fewer than 50 employers aren’t obligated to provide any form of coverage. However, they may be able to benefit from doing so anyways. Businesses with fewer than 25 employees can receive a tax credit if they choose to provide coverage. This credit is equal to 50% of the cost you cover for your employees’ health care.
Employers have varying perspectives on whether or not they should provide health care coverage to their employees. You will need to understand the culture of your workplace, the community you do business in and your relationship with your employees to determine the best solution for your business.
However, what many businesses don’t realize is that the employer mandates may not apply to their state.
Does the Employer Mandate Apply to Your Business?
Most businesses feel that they are going to need to prepare for the employer coverage mandate in some way or another. What they don’t realize is that the employer mandate only applies to businesses that operate in states that have decided to institute their own health insurance exchanges (which are the vehicles that will provide subsidies to eligible citizens and trigger the employer mandate). If your business is located in a state that chose to opt out of creating its own exchange then the employer mandate won’t apply.
You should check to see if the state you live in has decided to setup its own health insurance exchange. You won’t be obligated to participate in the employer health care coverage plan. However, you may still be eligible for federal tax credits if you are a smaller business offer health care to your employees. Many of those details are still being ironed out.
The new health care law will create a number of changes for small businesses. You should make sure that you understand the law and have a system in place to prepare for it before it goes into place in 2014.
Kalen writes about business, project management and project implementation strategies. He writes about the value of a healthcare administration degree.
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