Latest

Preparing for the Affordable Care Act: Advice for small businesses

October 15, 2021
By James Gussie

“Small businesses are the backbone of our economy,” said President Obama in his address to Congress on September 9, 2009. The Affordable Care Act was signed into law just three days later by President Obama, and it has been a major success for small businesses.

The affordable care act employer mandate 2021 is a new law that will be implemented in the United States on January 1, 2021.

Are you attempting to figure out how to effectively prepare your company for the Affordable Care Act’s (ACA) imminent implementation? I spoke with Don Fornes, our CEO of Software Advice, to learn more about how the act would impact our firm and other mid-sized companies. He assisted me in comprehending the ACA’s effect on our firm and provided five excellent recommendations for other companies in similar situations.

Table of Contents

Tip #1: Don’t alter your recruiting plans only because of the Affordable Care Act.

In other words, keep doing what you’re doing. If your business is expanding, don’t halt it because you believe the Affordable Care Act will raise your healthcare expenses. In fact, being part of a big group may be beneficial.

At Software Advice, we believe that larger is better. While the pay or play regulation may raise expenses for certain big organizations, most major companies currently offer coverage that satisfies ACA standards. In addition, there is no maximum deductible for big organizations, which will assist keep premium prices in check. Large organizations can only anticipate a five to 10 percent rise in health-care expenses in the worst-case scenario.

Tip #2: Wait till the dust settles before resuming coverage.

Some elements of the Affordable Care Act that have proved to be unpredictable costs on both public and private organizations may yet be delayed or changed by the government.

Don’s advice: Delay renewing your insurance as long as possible. Because companies aren’t required to comply with ACA regulations until January 2014, we’ve chosen to negotiate with our broker to postpone renewing coverage until December. That way, we can retain our existing coverage — which we appreciate — while waiting to see whether the government backtracks on any other provisions of the legislation. It’s a foregone conclusion.

Consider self-funding as a third option.

An employer pays premiums to an insurance carrier that covers the cost of claims made by workers under a fully-insured health insurance plan. In a self-funded plan, the company pays for the healthcare claims of its workers, taking the risk that was previously covered by the insurance carrier. The company may decide what coverage to offer and how much premiums, deductibles, and copays to charge employees. Employers may opt to manage the plan themselves or hire a third-party administrator or insurance provider (TPA).

So, why would a company take such a risk? If your workers are in good health, you may believe that your total claims would be far less expensive than the premiums that would come from community rating for a small group. As a result, you’re basically betting that you won’t need the insurance. Employers in a self-funded plan, rather than being grouped into community rating, base their anticipated claims amount on employee claims history and usage. When compared to fully-insured plans, self-funded plans are also free from state premium taxes, resulting in an annual tax savings of around 2%.

Tip #4: Think about a wellness strategy that is dependent on your health.

We’re thinking of implementing a “health-contingent wellness plan,” in which workers must satisfy specific health criteria in order to get benefits like fully subsidized health care. Biometric tests, flu shots, and participation in goal-oriented health challenges may all be linked to these incentives.

There are many advantages: healthy workers are less likely to submit claims, which lowers insurance costs.

Tip #5: Adjust your budget to account for rising expenses.

Determine your position in light of the fact that everyone’s expenses will rise. Examine the coverage choices available to your business and calculate how much money you’ll need to put aside for each scenario.

While this essay is unlikely to have addressed all of your queries, 2,700 pages of information is sure to leave you scratching your head. I hope Don’s suggestions will assist you in making better informed choices. At the very least, I hope they will enable you to ask the appropriate questions and guide you and your business effectively through the ACA transition.

The New Talent Times first published this story. Click here to learn more.

[Image credit of Freestock.com] .ca]

The aca requirements for employers with less than 50 employees are the rules that businesses must follow in order to be eligible for Affordable Care Act coverage.

{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”How does the ACA help small businesses?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”
The ACA helps small businesses by providing them with a variety of resources and tools to help them grow. These resources include business insurance, access to capital, and business development services.”}},{“@type”:”Question”,”name”:”Are small businesses exempt from ACA?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”
Small businesses are not required to provide health insurance under the Affordable Care Act.”}},{“@type”:”Question”,”name”:”Does the ACA apply to small businesses?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”
The ACA applies to small businesses with 50 or more full-time equivalent employees.”}}]}

Frequently Asked Questions

How does the ACA help small businesses?

The ACA helps small businesses by providing them with a variety of resources and tools to help them grow. These resources include business insurance, access to capital, and business development services.