Like it or not, the Affordable Care Act is a reality. The ACA has been the subject of intense debate on both sides of the aisle. Supporters claim it’s a boon for millions of uninsured Americans, while critics say its effects on the business community will be disastrous. Despite the dire predictions of detractors, the situation is not as bad for small businesses as it may seem.
So, how will the Affordable Care Act really affect small-business owners? Will your small business be able to afford to offer health care options to its employees? Will you be required to do so?
A Scalable Solution
More than 95% of the businesses in the U.S. have fewer than 50 full-time equivalent employees. If your business falls into this category, you will not be required to provide an employer-sponsored healthcare program. Your individual employees will be required to carry health insurance, but that’s another story.
Assistance for Good Samaritans
If your business has fewer than 25 full-time employees, and you would like to help them pay for their health insurance costs, the Affordable Care Act provides a tax credit designed to help you do so. Your business must pay for at least 50% of qualified individual employee health insurance costs. The credit is currently set to cover up to 35% of employer-paid health insurance premiums for plans purchased through the Small Business Health Options (SHOP) marketplace. Starting in 2014, that credit rises to as much as 50% of premiums paid by employers.
Benefits Increase Employee Loyalty
While your small business probably won’t be legally required to subsidize employee health insurance premiums, doing so may be worth considering. As a result of the Affordable Care Act’s Small Business Health Care Tax Credit, more small employers are likely to sponsor employee health plans. Of course, these benefits are very attractive to employees, and businesses that do not provide them may find themselves at a competitive disadvantage, when it comes to attracting and retaining quality hires.
Every employer knows that screening, interviewing, and training new employees is a costly process, so the enhanced employee loyalty that results from subsidizing health insurance premiums should be weighed as part of the health insurance decision, especially for jobs that require extensive or hard-to-find skill sets.
Weigh Your Options
There’s no one-size-fits-all healthcare solution for small businesses, as every business deals with a unique set of variables. But, the ACA is not as grim as detractors would have you believe, and it’s worth considering all the options.