Whew. Many employers were greatly relieved when the government delayed a key provision of the Affordable Care Act (ACA) that requires businesses with 50 or more full-time workers to provide them with health insurance or face potential penalties. But the reprieve doesn’t change the fact that health care expenses are a top concern for businesses of all sizes. And there are still no simple answers to the question on everyone’s mind: How will healthcare reform impact my costs? What is certain, however, is that employers need to get up to speed ASAP on how the ACA will affect their businesses. Many changes are already underway, and others will begin in 2014. Here are three tips to keep in mind as you assess the situation and consider your health care options.
1. Separate Fact from Fiction
Even before it became law, the ACA was a breeding ground for misinformation. For example, many still believe that eventually all employers must buy insurance for employees or pay a penalty. Fact: Businesses with fewer than 50 full-time equivalent (FTE) employees do not have to provide health insurance. Another myth is that health reform will definitely increase your insurance premiums. Although one survey of 900 employers found that nearly 20% expected the healthcare reform law to increase costs by at least 5%, the independent Congressional Budget Office estimates that the ACA could lower health insurance premiums by up to 4% for small businesses and 3% for large businesses.
2. Consider Changing Your Plan Design
While employers remain concerned about anticipated increases in 2014 health care costs, a new survey shows that nearly all (98%) plan to offer medical coverage for 2014 and 2015. However, nearly 40% will be changing their plan designs for 2014. Some 58% view private exchanges as a viable alternative to control cost increases, reduce administrative burdens and provide greater value. Talk to your agent to find out which plan options would be best for your business.
3. Be Aware of “Hidden” Costs – and Benefits
Companies with 50 or more employees will have to pay a fee of $63 per health care plan participant in 2014 to supplement the cost of covering those with pre-existing conditions. On a positive note, tax credits are available to qualified employers with fewer than 25 FTEs. Starting next year, eligible small businesses that purchase coverage through the SHOP may receive a tax credit of up to 50% of their contribution toward employees’ health insurance premiums. Photo Credit: Sebastiaan ter Burg