Health Care Reform & Your Business

We have heard the terms “Affordable Care Act” or “Health Care Reform” for a while now and with the enrollment deadline of January 2014 soon approaching, many businesses are facing tough decisions.

What is the Health Care Reform?

Health Care Reform is a law passed by Congress that was designed to provide greater access to health care. Simply, the health reform is designed to help people of with various income levels, employment situations and health status, have access to health care.

The purpose of the health reform is to ensure by 2014 everyone, in some way, has health insurance. This could be their own insurance, through their employer or covered by government programs such as Medicaid or Medicare.  With making insurance available to everyone, the cost of health care should begin to go down.

What you should know for your business

Size Matters

The first thing you should know about the Health Care Reform is it depends on the size of your company on how it will affect you.  If your business consists of less than 50 full-time employees, you do not have to offer health insurance and you are not penalized if you don’t. If you do decide to offer insurance, you may get tax credit to help with the cost. If you have more than 50 full-time employees, then you are strongly encouraged to provide healthcare to everyone otherwise you will have to pay a fee of $2,000 per employee.

Plan Requirements

All employers will need to provide the complete details of health care plans readily available to their employees containing the “essential health benefits”, some of which are often excluded from such coverage now. According to Kaiser Family Foundation, essential benefits must include a number of specific services, including maternity and newborn care, emergency services, mental health and substance abuse services, preventive care and prescription drugs. You will also need to provide employees written notice on the state health insurance exchanges. Human Resource Management Systems (HRMS) can be set up to provide information on all of an employee’s health care options.
Exchanges

New state-based health insurance exchanges, or marketplaces, should be in place by 2014. The marketplace allows small businesses and individuals to shop for coverage, choosing from a variety of competing plans that meet federal requirements. Employers are expected to have access to information about available exchange plans in October of this year.

Risks

Because of these requirements we have seen many instances where companies want to grow their business, which includes hiring more people, but are hesitant because they will then have to pay for health care. As a way to work around this some businesses, when hiring, are putting a cap of 30-hour work weeks.

What about franchises?

If you own multiple franchises, or businesses, you may be wondering how this affects you. Here are the main things to be aware of. Under the Health Care Reform, a group of employers or commonly owned businesses are considered a single, and most likely, large employer. Even if you own very different kinds of businesses, you may have to count up all of your employees and treat all of your businesses as one.

According to the IFA, many franchise businesses have total employment exceeding the 49-worker ceiling. Unfortunately this puts many franchises at a disadvantage since their competition may not have to meet the health care requirements. As a result, many franchise owners may decide to offer fewer well-paying jobs by increasing automation or change to part-time work.

For more information on the Health Care Reform visit makingsenseofhealthcare.org.

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