Insurance Matters….Does ObamaCare (ACA) Hurt Small Business?

Insurance Matters….Does ObamaCare (ACA) Hurt Small Business?

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By Amira Wazeer
Before we get started, we need to address one of the media’s favorite talking points, the claim that, "ObamaCare hurts small business." According to the Obamacare Myths website obamacarefacts.com
“The unbiased truth on ObamaCare and Small Business is Obama Care helps most small businesses.”
As Reported By Fox News “The Affordable Care Act (ACA) tackles small business owners’ top priorities when it comes to health-care reform: cost and accessibility. The law will significantly rein in costs while providing more health coverage options for entrepreneurs,” John Arensmeyer, founder and CEO of the Small Business Majority, said in a statement.”
So as many of us have said the hype that the Affordable care Act will destroy America is simply a matter of politics. Most Americans who work for small businesses will benefit from the new healthcare reform law.
In addition there has been no evidence that ObamaCare will affect big business hiring practices. ObamaCare actually creates jobs including a grant to create an estimated 5 million jobs in the healthcare industry. Again I remind the reader that money is available for training in the medical field.
The myth busting website goes on to say that “the new law does not add a dime to the deficit.
According to Congress’s official independent scorekeeper, the Congressional Budget Office, the new law is completely paid for through a wide range of cost-saving reforms, from cracking down on health care fraud to helping hospitals and doctors spend their health dollars more wisely.”
While 96 percent of employers won't pay additional taxes, there is an increase to the current Medicare part A tax, paid by 3% of businesses and employees making over $200,000.
There will be an annual fee of $63 dollars paid by small business employers purchasing insurance. The ObamaCare small business fee is decreased by a small amount each year until 2017 when pre-existing conditions are phased out.
These costs may get passed onto employees. Due to tax credits, small businesses will still see a net savings, while larger firms will have more up-front costs which may get passed onto employees.
There is also a requirement for employers with the equivalent of over 50 full-time equivalent employees to purchase health insurance for their workers or pay a penalty by 2015/2016.
The average U.S. family and their employer pay $1,000 a year extra in health insurance costs to cover care for the uninsured. By bringing the uninsured into the system and tackling the drivers of health care costs, the new health care law will make health insurance more affordable for businesses.
The real truth is for too long, small business owners have struggled to keep up with the ever rising cost of health insurance for their employees.
According to the White House “small businesses have historically paid 18 percent more for health coverage than larger employees.
Today, a tax credit is available to businesses with 25 or fewer full-time-equivalent employees and average wages of $50,000 or less.
These tax credits will benefit an estimated two million workers who get their insurance from an estimated 360,000 small employers.” Did you know 90 percent of U.S. firms have less than 20 full-time employees?
The Affordable Care Act makes it easier for businesses to find better coverage options and builds on the employer-based insurance market already in place.
For the first time ever, small businesses have access to a new tool that lets them research and compare their health insurance options in one place – HealthCare.gov.
Just enter some basic information about your business, and you’ll see a list of all the insurance options available in your area.
Small business owners will be able to offer their employees a range of plans from different insurers just like big employers do, while still receiving a single bill and writing a single check. They’ll also still be able to choose how much of their employees’ insurance costs they want to cover.
And because small business owners will be joining a much bigger risk pool, they’ll no longer be vulnerable to sharp swings in their rates based on the health of a few employees. It stops insurance companies from taking advantage of the small business owner.
Giving the consumer and business owner more control and making health care coverage more affordable.
Today, we have the new 85/15 rule: insurance companies must spend at least 85 cents of your premium dollar on your health care or improvements to care. Insurance companies must publicly justify their actions if they want to raise premiums by 10 percent or more for small businesses.
An increasing number of States have more power to block unreasonable premium increases from taking effect.
Positive Effects of ObamaCare on Small Business
ObamaCare provides small businesses with affordable insurance options, cost assistance and increased buying power via the SHOP exchange (explained below).
Since small businesses with fewer than 50 full-time equivalent employees can use the SHOP to get better deals on employee insurance, but aren't mandated to do so, it's safe to say small businesses will not be hurt by ObamaCare, but will in fact benefit.
• The smaller the businesses the better the tax breaks.
• Businesses with over 50 full-time equivalent employees are exempt from the fee on their first 30 full-time workers greatly reducing the negative affect the law could have on businesses who just barely qualify as a large firm.
• The Employer mandate isn't meant to hurt small businesses, it's to ensure that companies like Walmart take a Shared Responsibility in providing healthcare access to more Americans.
• Small employers can see up to a 50% reduction in their share of the cost of employee premiums. The amount employers do pay is tax deductible and can be carried forward or backward.
• Small employers can offer better quality benefits due to the increased benefits, rights and protections offered by ObamaCare.
• Due to small businesses being able to shop for group health plans on their State's Health Insurance Marketplace via the SHOP, AKA the Small Business Health Options Program, small businesses now have the same buying power as larger firms. Along with tax credits, increased buying power helps small businesses afford to provide benefits to their employees.
• 96 percent of all firms in the United States - or 5.8 million out of 6 million total firms - have under 50 employees and will not be penalized for choosing not to provide health coverage to their employees. 96% of those firms already cover full time workers.
That means less than .2 percent of small businesses (10,000 out of 6 million) will actually have to provide insurance to full-time employees or pay the shared responsibility fee due to ObamaCare.
ObamaCare delays the SHOP until 2015.
The opening of the SHOP "Small Business Health Options Program" (the part of the marketplace small businesses use to buy employee health plans) has been pushed back to November 1st, 2014 (when open enrollment begins for 2015).
Firms with more than 50 full-time equivalent employees won't be able to use the marketplace until November 1st, 2015. Those with 100 or more FTE won't be able to use the SHOP until 2016. Until the web portal for the shop opens in November employers can use a paper application to apply for shop plans and tax credits.
Small businesses can still buy a SHOP plan through an agent now and claim tax breaks up to 50% of their share of employee premiums starting January 1st, 2014.
Small business health care tax credit may be carried back and applied retroactively to previous tax years, or carried forward to future tax years. Learn more about the ObamaCare SHOP Small Business Health Options Program at healthcare.gov.
Employer Mandate Delayed Until 2015 / 2016
ObamaCare's employer mandate has been delayed until 2015 / 2016. In 2015 employers with more than 100 FTEs will need to provide coverage to at least 70% of full-time employees. Starting in 2016 employers with 50 or more FTEs will need to provide coverage to "substantially all" (95%) of their full-time workforce.
A quick look at what ObamaCare means for small businesses.
• ObamaCare creates the Small Business Health Options Program or SHOP, a part of each States Health Insurance Marketplace, where small businesses with fewer than 50 full-time equivalent employees can shop for group health plans starting October 1st, 2013. In 2016 those with 100 full-timers or less can use the SHOP.
• The online portion of the SHOP doesn't open until November 15th, 2014; in the meantime small businesses can apply for SHOP plans and tax breaks using a paper application.
• Taxes and tax credits are based off of the number of full-time equivalent employees (FTE) and their average annual wages, not solely on the number of full-time employees.
• Small businesses with fewer than 25 full-time equivalent employees with average annual wages below $50,000 can get tax credits (as adjusted for inflation beginning in 2014) to help pay for employee premiums.
• Tax credits are retroactive since 2010 so you can still claim your health insurance tax credit for any year since 2010.
• The requirement for businesses with over 50 full-time equivalent employees to provide health coverage to full-time employees is often referred to as the "employer mandate" and is officially part of the Affordable Care Act's Employer Shared Responsibility Provisions.
• Small businesses with more than 100 full-time equivalent employees with average annual wages above $250,000 must provide health coverage to at least 70% of full-time employees starting in 2015 and 95% of full-time employees starting in 2016.
• Starting 2016 employers with 50-99 full-time equivalent employees will have to insure their full-time workforce as well. Franchises are counted as separate businesses so franchise owners with less than 50 full-time workers won’t have to provide health coverage to their full-timers.
• Companies with 50 or more full-time equivalent employees will need to file an annual return reporting whether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions.

Starting in 2015 any business who is supposed to insure its full-time workers but does not will have to make a $2,000 per employee shared responsibility payment on their yearend federal income taxes. The fee is $3,000 if the employee gets health insurance subsidies through the marketplace. All businesses with over 50 full-time equivalent employees have to let their employees know about their State's Health Insurance Marketplace / exchange.

• Transition relief is available to small businesses and large businesses transitioning into compliance with the new mandate. Visit IRS.gov and see the official IRS rules regarding transition relief.
• Businesses making over $250,000 in profit must pay a .9% increase on the current Medicare part A tax. The tax is split (.45% each) between the employer and employees making over $200,000 individual ($250,000 family).
An employer’s size is determined by the number of its employees. Employer benefits, opportunities and requirements are dependent upon the employer’s size and the applicable rules. Generally, an employer with 50 or more full-time employees or equivalents will be considered a large employer.
(Amira Wazeer is a state licensed and federally certified insurance agent with over 14 years experience.  She specializes in Medicare plans, Affordable healthcare plans, dental and vision plans, Life insurance for diabetics and Janazza (final expense) insurance. Consultations are free. Need a speaker at your upcoming events or have Questions and comments contact a.d.wazeer@ Comcast.net or call 404 202 1926. Coming soon my private exchange and website.)

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