Health Care, You and Your Business: An Overview
For better, for worse, for richer, for poorer—and there’s undoubtedly some of all of that involved—health care for all is the law of the land, with some of that responsibility falling on the shoulders of businesses both large and small.
To provide a brief overview of a business owner’s health care responsibilities under the Affordable Care Act (ACA), we’ve gathered a panel of experts to offer information and advice. But as a business owner, you should consult with your own financial, legal and insurance advisers in order to best understand your health care responsibilities, if any, when it comes to your employees.
Our expert panel includes:
- Rhett Buttle is vice president of External Affairs at Small Business Majority, a national small-business advocacy organization founded and run by small-business owners (SmallBusinessMajority.org)
- Kathryn Mattson is director of Individual and Small Group Sales for Blue Cross Blue Shield of Arizona (AZBlue.com)
- Rick Murray is CEO of Arizona Small Business Association, Arizona’s largest trade organization (ASBA.com)
- M. Todd Ratay is an associate with Neil, Dymott, Frank, McFall & Trexler in San Diego, California. His practice areas include professional malpractice, health care matters, and general civil liability.
HOW DOES THE ACA AFFECT SMALL BUSINESSES?
RATAY: The Affordable Care Act encourages small businesses—companies with fewer than 50 employees—to provide health insurance for their employees through a system of possible tax credits. This is an area of ambiguity during this nascent period of the ACA because there has been no indication as to how long these tax credits will be continued. Additionally, there is some concern that employees will come to expect this benefit, but some small companies may only be able to offer it because of the tax credits currently in place. Because the tax credits are not locked into the law, it remains a significant question mark for employers going forward.
HOW SHOULD A SMALL-BUSINESS OWNER (50 OR FEWER FULL-TIME EMPLOYEES) GO ABOUT CHOOSING THE BEST HEALTH PLAN FOR THEIR EMPLOYEES?
MATTSON: The task of choosing the best health plan for a small business will vary widely based on the specifics of the business. We suggest working with a local licensed broker or going directly to a health insurance carrier for more education. A broker or carrier will take the time to explain the details and options available, as well as help identify a budget and the benefits that are most important for that business. Many law firms and accounting practices have also begun offering services to assist small businesses in navigating ACA requirements.
Small businesses can also use the [online] ACA Marketplace to find insurance for their employees; this is known as the Small Business Health Options Program, or SHOP. The SHOP Marketplace is open to employers with 50 or fewer full-time employees; purchasing through SHOP may qualify some small-business employers for a tax credit.
The benefits of working with a broker or a carrier directly are numerous. Two in particular are: 1) buyers will have a thorough understanding of their plans; and 2) buyers will have a point of contact that will answer questions specific to their situation. [Note: You won’t pay more if you use a SHOP agent or broker. Source: HealthCare.gov]
ARE THERE STATE-SPECIFIC DIFFERENCES?
BUTTLE: Yes. For state-specific health care information and resources, small-business employers can visit Small Business Majority’s Health Coverage Guides (HealthCoverageGuide.org). These guides walk small businesses through the enrollment process and explain the terminology and options the [SHOP] Marketplace offers. They also detail who’s eligible for coverage, how to choose a health plan, how owners can enroll their business and their employees, and what the [SHOP] Marketplace provides. Small-business employers can also visit HealthCare.gov for information about coverage options in each state, including eligibility, availability, premium rates, cost-sharing and more.
WHAT ABOUT PENALTIES?
MATTSON: Small businesses have never been required under the ACA to provide employees health insurance, which means there are no government penalties for employers who meet the ACA definition of ‘small’ [50 or fewer full-time-equivalent employees].
ARE THERE ANY RELEVANT DEADLINES?
BUTTLE: There is no deadline—small-business employers are able to enroll in the SHOP Marketplace year-round. This is true for all states, regardless of whether they have a federally or state-run Marketplace.
A TALE OF TWO SMALL BUSINESSES
For some businesses, the ACA has provided them with a way to offer more affordable health care coverage to their employees. For others, it’s seen as a financial impediment to their business. Here are two examples, offering different points of view:
The ACA is good news for Circuit Media, a Denver-based small business that publishes and disseminates advertising, news and information through print and online media. “I’ve been looking forward to providing my employees with more flexible and comprehensive health coverage,” says Rebecca Askew, Circuit Media’s CEO, who recently signed her company up with Connect for Health Colorado. “I’ve always provided coverage for my employees, but the rising cost of health care has made it increasingly difficult. In fact, for the past several years, we’ve had at least a 20% increase every year and had to switch insurance companies three times. Colorado’s health insurance Marketplace allowed me to compare costs between providers, and my staff [members] were able to pick the plan that works best for them. For the first time in years, our costs aren’t going up and my company is receiving a tax credit for enrolling through the Marketplace.”
On the other hand, Brush Masters, a family-owned paint, drywall and pre-finishing company in Maple Grove, Minnesota sees a different side of the ACA story. One of four family owners, Jessie Otto says that the company employs approximately 150 employees during peak months.
“Because of the recession, we had to give up our medical program about five years ago,” Otto says. “While we haven’t made any final decisions, after counsel from our insurance company, we agreed that offering health care was not an option given the high number of uncertainties related to the associated costs (since the company does not currently have a policy in place). Thus, we are looking conservatively at fines of around $100,000 which will drastically affect the way we do business.”