With a new administration elected in Washington, many eyes are focused on the Affordable Care Act (ACA), also known as Obamacare. During the campaign, Republicans, including their presidential nominee Donald Trump, vowed to repeal and replace the ACA. As the Republicans won the majority in both the House of Representatives and the Senate, as well as the necessary number of Electoral College votes for Trump’s election, the vow to change the ACA could turn into a reality.
Many small business owners are excited for a change because the ACA mandates that businesses of a certain size provide affordable health care to their employees and dependents, which can be expensive and may affect company growth and profitability.
Instead of “repeal and replace,” though, there’s now talk by the incoming administration of “revise and replace” instead. This is because some portions of the ACA are popular for many in this country, such as the 20 million Americans newly covered by health insurance because of the ACA, including those able to cover their kids ages 26 and younger on their plans. Another provision that’s popular, regardless of party line, is the one not allowing insurers to deny coverage for those with preexisting conditions.
What can small businesses do?
Replacing or changing the ACA will take time, so what can small business owners do in the meantime to make the mandate more affordable? Tweet This As a reminder, businesses employing fewer than 50 full-time equivalent (FTE) employees aren’t required to provide health insurance for their employees. The ACA affects those with 50 or more FTEs, requiring such businesses to provide employees and their dependents (up to age 26), with affordable and comprehensive health insurance.
Here are some ideas:
Look Into Group Plans
A group rate might be less expensive than individual plans, and you can organize your own group. A group doesn’t have to contain hundreds of employees – it can be as few as two.
Hire an Insurance Broker
Insurance brokers specializing in small businesses will better understand your available options. And “hiring” may not actually cost you anything, as some brokers work on commission. Even if you pay a broker fee, you are buying expertise that can save you money and find better plans for your employees.
Choose a High Deductible Plan and Savings Account Combo
Instead of opting for a more expensive health plan with lower deductibles, you can go the opposite route. Consider getting a high-deductible plan and form health savings accounts. Employees and businesses can make pre-tax contributions to cover the additional medical expenses. Note that there are rules about how high the employee’s portion of the deductible can be.
Look Into SHOP.
The Small Business Health Options Program is open to some businesses with fewer than 50 FTE employees. Though small businesses with fewer than 50 FTE employees aren’t required to provide health insurance, many still do, to attract talent and to be good citizens. The SHOP program may have better insurance options for you. Plus, some businesses may qualify for tax credits for purchasing insurance through it.
Give Employees Options
Rather than offering only one way to get company health insurance, give employees a set amount of money to use for the health plan of their choosing. This is a defined contribution option, which allows employees to allocate the insurance payment to a plan that best meets their needs. The health insurance plan you offer your employees doesn’t have to be a one-size-fits-all approach.
Time will tell what changes are to come from the new administration. Health care costs are not likely to drop, though, and employees will still need health care, no matter who pays for it. Small businesses should stay on top of the trends and be proactive in understanding their options.
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