What effects will the Affordable Care Act have on small businesses that currently offer health care to their employee base of less than 10?
TIM PLIMMER, THE PLIMMER GROUP, TPLIMMER@ THEPLIMMERGROUP.COM
Many of the insurance aspects of the Affordable Care Act will be implemented in 2013 and virtually all residents of the United States will have health insurance in 2014.
The law takes into account the special circumstances of businesses with fewer than 50 employees. While larger firms are required to provide health insurance, small businesses with fewer than 50 employees are not. However, to encourage small firms to provide health insurance to their employees, the act provides a number of features that apply to firms currently providing insurance and to those that will begin in 2014:
• Firms with fewer than 25 employees and average wages below $50,000 per year may qualify for a tax credit of as much as 35 percent of the cost of the insurance. This credit increases to 50 percent in 2014.
• In 2014, small businesses with fewer than 100 employees can buy their insurance through state-based exchanges, which will give them better choices and lower prices than are available to many small businesses today.
• Under the health care law, employer-based plans that provide health insurance to retirees ages 55-64 can now get financial help through the Early Retiree Reinsurance Program.
The details of the state-based exchanges are still being developed and three models are now being implemented. These include state operated exchanges (Minnesota, for example), state-federal partnerships (Iowa), and federally operated exchanges (Wisconsin, North Dakota and South Dakota). Each of these models will have slightly different details so it is best to work closely with your insurance broker to assess how this new system will affect your business.
DANIEL B. MCLAUGHLIN, director, Center for Health and Medical Affairs, University of St. Thomas, Opus College of Business