The year is 2013 and in less than 12 months, full-scale implementation of the Affordable Care Act of 2010 (ACA) will begin.
Also known as Obamacare, the sweeping legislation will fundamentally alter the way in which small-business employers offer health insurance packages to workers.
The reform is full of twists and turns, and as such, has thrown many an entrepreneur into a frenzy trying to understand their obligations under the ACA.
Income.com knows small-business owners may not hold the legislation in the highest regard, but it will soon be the law of the land, and entrepreneurs will need to comply with each measure that applies to them.
Problem is, many are completely in the dark on what will be required of them. Whether it’s the employer mandate and penalty taxes or the basis of an insurance exchange, a number of small-business owners don’t understand healthcare reform, so here are two essentials to Obamacare you need to know:
Only Those With 50 or More Employees Are Mandated To Provide Coverage
A recent survey of small businesses with 50 or fewer employees recently revealed the depths to which entrepreneurs simply don’t understand the most substantial and crucial element of the law: the employer mandate.
In an eHealth poll, 32 percent of responding small businesses believe the law will require them to extend coverage to employees, regardless of business size. What’s worse, 24 percent think if they don’t, they will be taxed.
In truth, only 44 percent of the respondents with 50 or fewer employees correctly knew they will be required to provide health insurance. The employer mandate only applies to businesses that cross the 50 employee threshold; if you’re above, you have to provide insurance; if you’re below, you are exempt.
However, being spared the mandate doesn’t mean employers that will still offer health insurance to employees won’t deal with the rising cost of health insurance in general. One way to cut the costs of healthcare is implementing employee health benefit incentives, rewarding those who keep healthy or lose weight, which will offset health insurance-related expenses.
Insurance Exchanges Will Open in October
The survey also revealed confusion over what an insurance exchange is: Just 18 percent could confidently define or explain a health insurance exchange.
So what are these exchanges? In short, they are government-run marketplaces in which individuals can compare and buy health insurance packages.
Their relevance to small businesses is important to note. Some of the exchanges will be Small Business Health Options Programs, wherein small-business owners can compare packages and select the right ones for their business. However, be aware, sometimes procuring insurance through an exchange can open up a business to risk related to higher costs.
Income.com urges every entrepreneur to fully understand his or her duties as a small-business employer under the ACA. It’s vital to your business that you know whether or not you will qualify under the employer mandate or what an exchange is and how it can help – or possibly hurt – your health insurance policies.