How Can the Affordable Care Act Be a Positive Move for Small Businesses?
Since its passage in November of 2009, politicians, pundits, economists and business executives have issued numerous sound bites on how this bill will affect small businesses. Depending on their political affiliation, the dialogue has been both positive and negative. I’d like to take this opportunity to give a realistic, non-biased opinion on ways that the Affordable Care Act can have a Positive Impact on small businesses.
1. Speak to any small business owner and they will tell you about the great employee that got away due to a better benefits package offered by another, larger business. Once the Act is implemented, all companies will have access to affordable options which would level the playing field allowing both small and large businesses to offer comparable plans.
2. Each year when it comes time for businesses to begin negotiating with their plan providers for the upcoming year, they have no idea how much their costs will increase. The Act will limit the amount that premiums can go up over the previous year. This means that when going into provider negotiations business owners will have an upper limit on benefit costs. This will make the budgeting process for benefits more realistic.
3. Currently, insurance companies are allowed to charge employers a surcharge if they have employees with serious health conditions. The Act will eliminate this surcharge which in turn reduces the amount of premium paid by the company.
4. Companies that offer coverage to their employees will be eligible for tax credits. These credits are dependent on the size of the company and the average annual wages of the employees.
5. If it becomes necessary for an employer to discontinue offering health insurance as a benefit to its employees, they can do so with some peace of mind. Since the Act removes restrictions on pre-existing conditions, employees would be able to get coverage on their own at a reasonable price. This is also dependent on the size of the company as there could be penalties for a company not offering coverage.
While no one has all the answers on what the impacts of the Affordable Care Act will be, small business owners will definitely see positive benefits from it. More stable health insurance premiums year over year and access to better plans at a lower cost are the biggest. This will allow business owners to be able to budget health care premium expenses and be able to use dollars previously used for healthcare for other areas of their business.