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The Affordable Care Act (ACA) provision for health insurance exchange markets is set to start on October 1, 2013. Everyone in America will have access to affordable health care insurance, regardless of age, gender or any pre-existing condition. Insurers will be prohibited from increasing premiums for plans based on these factors. Americans will also have no financial limitation caps placed on needed health care services for catastrophic illnesses, such as cancer or a traumatic brain injury.

However, some provisions of the law have prompted concern from small business owners due to the skyrocketing costs of premiums for health coverage. The Kaiser Family Foundation found that plans for a family of four increased from an average of $9,068 to $16,351 from 2003 to 2013. There has also been a lot of misinformation spread about the effects of the laws. If you own a small business, or if you administer benefits, it can all be quite confusing. What do you need to know about the change, and how will this affect your company’s bottom line?

Small Business Plan Basics
First, you don’t have to worry about the employer provision requirements if your company employs less than 50 people. You can provide insurance if you choose to do so or workers will need to provide their own insurance through private insurers or via the health care exchange market that is being set up. Because more time will be needed for employers to integrate the laws into their human resource policies, your business does not have to be fully compliant until January 1, 2015. After this date, it will face fines that approach $2,000 for each individual who is not insured.

The advantage to treating all of the employees of the small businesses in a state as a distinct group to combine the risks of more expensive health needs is that the premium rates will be more stable. This is due to a mix of younger, and generally healthier, workers being included in the pool with older employees who may need more health care services.

Debunking the Most Common Myth
According to a number of studies, the biggest concern for more than half of small businesses is that the companies will not be able to afford the health care plans or penalties, so this will cause many to go out of business. Some of the media would like to make you believe that this is a crisis situation for your business. The RAND Corporation has found that for most small businesses, the rates won’t increase more than the typical annual rate. In fact, many states will offer tax credits to your business for employee premium costs.

Transparency and Comparisons Mean Likely Savings
There is a significant advantage for your business in that you will have access to the state insurance market exchange. This provision of the ACA is called the Small Health Options Program (SHOP). This marketplace will allow for comparisons between different plan providers and options. This side-by-side lineup is expected to result in price competitiveness among insurance providers.

A Focus on Healthier Employees
Private insurers tend to consider a business with fewer than 100 employees as a more significant cost risk. Increased access as a larger pool will likely save your business on premiums. The premiums paid will be dependent on your business location and the health of your employees. As such, a large percentage of employers plan on offering preventative and lifestyle services to help employees maintain healthier lives. More than half of those surveyed in key studies have indicated that employee wellness programs will factor big into their plans to mitigate the possibility of large premiums.

There’s a lot of information to digest between now and when your business needs to have its health care plans in place. Give us a call at 888-888-8888, and one of our agents can help you understand the effects of ACA better and make sure that your company is ready for it.

Posted 11:32 PM  View Comments

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