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Category Archieve: Life Insurance Blog
  • Jan-20-2014
  • Richard Reich
Rising Healthcare Costs

A report from the small business financing company Merchant Cash and Capital revealed that small business owners are still confused about how the Affordable Care Act (ACA), aka “Obamacare,” affects their businesses. The survey, conducted in November 2013, found that 40 percent of the 542 surveyed businesses are still uncertain about how the new healthcare law would affect them.

Since the disastrous rollout of Healthcare.gov, the Obama administration has added a one-year delay to online enrollment for small businesses looking to purchase Obamacare. That gives business owners some time to familiarize themselves with the law, but eventually, these small businesses will have to comply with Affordable Care Act mandates.

More Stats from Small Businesses

Some ACA advocates claim that small business owners are selfish when they don’t provide health insurance for their employees, but many of these owners don’t have insurance themselves. One in four business owners is uninsured, according to the Merchant Cash and Capital report. Of that group, 83 percent would be eligible under the individual marketplace exchange.

Small business owners aren’t counting cash in the back while their employees remain uninsured. They are trying to make ends meet and create a stable business, sometimes without the safety net of personal healthcare. The survey revealed that 40 percent of respondents don’t currently offer health insurance and don’t plan to. Penalties and fines await these businesses if they don’t get in line with ACA mandates.

Nuts and Bolts of Obamacare

Thanks to Obamacare’s calamitous start, mandates that penalize businesses with 50 or more employees that don’t provide health care coverage don’t begin until 2015. Next year, businesses that have 50 or more employees can either provide health insurance or pay a fee of $2,000 per full-time employee.

It’s not all bad news for small businesses, though. If you’re an employer of fewer than 25 full-time workers who earns at least $50,000 per year, you can get tax credits to subsidize up to half of health insurance costs. Before 2015, small business owners need to determine how they’re impacted by the law and how these new costs fit into their budgets.

Small Business Weigh Their Options

Businesses of around 50 employees face a tough decision come 2015. If you top that number and continue to grow, it’ll cost you in the form of penalties or health insurance costs. Some businesses don’t have the revenue stream to support that kind of cost, so they’ll try to get below the cut line mandated by the ACA. Small businesses on the upward swing will hope to continue growth to 50 employees and beyond. If they haven’t already, they’ll look at health insurance options online and through the ACA marketplace. Most entrepreneurs are familiar with business insurance, and life insurance and your current insurance provider may be able to facilitate health insurance or point you in the right direction.

Many Republicans speak of repealing the Affordable Care Act, but for at least one year, business will have to comply with this unprecedented reform. It may determine the future of Obamacare leading up to the 2016 election.


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    • Intramark Insurance Services, Inc.