Top 5 Health Care Changes Small Businesses Need to Know

On June 28 the Supreme Court upheld the Affordable Care Act, including the individual mandate, which requires nearly every American to purchase health insurance coverage or
pay a penalty.

In the coming months, much will continue to be written, discussed and debated about the law.  However, it is the law, and it’s important to understand how it will affect you as a small business owner. Some of the provisions are already in effect. Others will not go into effect until January 1, 2014. According to the Kaiser Foundation publication, Focus on Health Reform, here are the top 5 changes small businesses need to know:

1. Beginning in 2014, all health insurance plans must guarantee the availability and renewal of coverage regardless of health status.  Higher premiums based on health status will not be allowed. Premiums for new plans will only be allowed to vary on the basis of age, tobacco use, policy type (individual or family), and geographic location.
2. Small businesses will have the option to purchase insurance through the Small Business Health Options Program (SHOP Exchange). States are required to create these exchanges by 2014, otherwise the federal government will run one in the state. Employers may choose to continue to purchase insurance through the market outside of the exchange, but the goal of the exchanges is to reduce costs.
3. Starting in 2014, a business with 51 or more full-time equivalent (FTE) employees will be fined $200 per employee (excluding the first 30 employees) if they do not offer coverage for employees who work an average of 30 or more hours a week.
4. Businesses with 50 or fewer FTE employees are exempt from these penalties.
5. Small businesses with fewer than 25 FTE employees may be eligible for tax credits to assist in the cost of health care insurance. See the Kaiser publication for more details.

How are you preparing for Health Care Reform?  What changes have you made, if any?  Please feel free to leave a comment below.