The Affordable Care Act for Medium Sized Businesses

The Affordable Care Act for Medium Sized Businesses

The Affordable Care Act (ACA), aims to provide affordable health care coverage for all individuals from 2014 and onwards. It aims to help those who purchase individual health care coverage, including small businesses, to have access to affordable health care through the creation of new health ‘exchange’ programs. These programs must adhere to a minimum set of standards, but will ultimately provide access to health care for those with limited income, which currently prevents them from purchasing coverage on the private market. For employers, there will be several changes to the types of health care coverage currently offered. Restrictions will be implemented, preventing employers from placing an annual dollar limit amount on the policies they provide. Similarly, health care coverage cannot be dropped due to preexisting conditions, and the act aims to reduce out of pocket costs for preventative care. Insurance companies must also justify any increases in premium rates which are 10% or more. Some of the requirements under this act have already begun to be implemented, with others becoming available from 2014 and onwards. For example, under the extension of dependent coverage, the age of eligible dependents has already increased to 26 years of age. Plans are prohibited from excluding dependent children under 19 years of age due to preexisting conditions. Similarly, the elimination of lifetime benefits limits and a requirement that health care plans cover preventative services are currently in effect.
The Affordable Care Act, will impact employers differently depending on several factors, one of which includes the size of the company. Small and medium sized businesses, those which employ less than 25 and less than 50 workers respectively, will not be required to provide health insurance. Small businesses may be eligible to buy health care coverage through the small business health options program exchanges (SHOP). This enables small businesses to have purchasing power currently only seen within larger companies. In addition, individual marketplaces for self-employed workers will become available, with state operated insurance exchange programs providing access to affordable health care. Unlike small business, medium sized companies will not be eligible for tax credits. They will have new coverage options, but will also face penalties if one or more of their employers obtain federal subsidies through health care exchange programs.
Changes under the Affordable Care Act are therefore variable and highly individualized depending on the type of employer. As a result, employers must not only become familiar with the ACA and how it may impact their company, but must also ensure that they effectively administrate their health care plans under the new regulations. Subsequently, many companies are choosing to utilize various HR solutions for benefits administration and management. HR solutions such as these can often be tailored to meet the individual needs of the company, and integrate various HR tasks, such as benefits, payroll, and workers compensation whilst providing HR consulting and training solutions. Utilizing such HR options, may provide a more cost effective and streamlined solution for the medium sized company, whilst ensuring full compliance under the Affordable Care Act.

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