If you are a small business owner, you’ve probably heard about the Affordable Care Act. Enacted into law in 2010, the ACA’s aim is to make healthcare more affordable and accessible to individuals in the US. While many view the act as controversial, others appreciate that the government is making an effort to improve the quality of care for the country. Whatever side of the political fence you’re on, there are a few things that you need to know about the Affordable Care Act if you own a small business. Here are four ways that the ACA may affect your company and some suggestions for navigating it.
New way to find the right plan for your business
In the past, shopping for health insurance was neither fun nor easy. The Affordable Care Act has created a mechanism that allows small business owners to simplify the process. The Small Business Health Options Program (or SHOP) is essentially a health insurance clearinghouse where small busine
sses and individuals can compare plans to find one that meets their needs. While business owners are not required to use the SHOP exchange to purchase their health insurance coverage, supporters of the Act argue that it will simplify the process considerably.
No coverage? Facing potential penalties
One of the biggest implications of health care reform that has small business owners concerned is potential penalties for not providing adequate coverage. Often, the cost of health insurance is prohibitive for some small businesses, so small business owners don’t necessarily provide adequate healthcare coverage. However, under the Affordable Care Act, small businesses that employ over 50 people may be subject to costly penalties. So if you employ over 50 people and do not provide proper coverage, take note. You could be facing thousands of dollars in penalties moving forward if you don’t purchase health insurance for your employees.
cial tax credits for small business
To offset the cost of health insurance for small businesses, the government is offering tax credits if your business meets certain metrics. For example, businesses that employ 30 or fewer people can potentially receive up to 35% in tax credits off the cost of insurance premiums this year. Moving forward, the same businesses can receive up to 50% in tax credits. One important thing to keep in mind is that the tax credits will only be available for those companies where average salary is lower than $55,000 annually.
Considering a wellness program
If you had been thinking about creating a corporate wellness program for your business, now is the time. Under the Affordable Care Act, businesses that do not currently have corporate wellness programs may be eligible to apply for grant funding that can help get the program up and running. These grants are meant to encourage business owners to implement these changes
and improve the health of employees over the long term. So if you’ve been considering developing a corporate wellness program, it’s a good time to get started!
The implantation of the Affordable Care Act means several changes for small businesses. The ACA simplifies the process of shopping for insurance by providing small business owners and individuals with access to the Small Business Health Options Program. Some businesses may be hit with hefty penalties for not providing adequate coverage, so it’s a good idea to start shopping! Tax breaks are also available for businesses that meet certain criteria, and companies may choose to apply for grants to help them create corporate wellness initiatives. No matter which end of the political spectrum you fall, these changes are being implemented across the country. So small business owners should be paying attention.
About the Author: Elizabeth Alton is a freelance business and technology writer. She covers trends related to small business, entrepreneurs, the evolving digital landscape, and writes for Engagement Health about the latest trends in employee wellness programs.