With Obamacare going into full effect at the first of 2014, the time for preparation and transition is now.
The cornerstone of Obamacare is the requirement that every American have adequate health insurance and that insurance carriers provide coverage regardless of the preexisting medical conditions.
If your business has 50 or more full-time employees you are required to provide coverage or you could face fines and penalties. If your company does not have 50 employees it is still important to provide your employees with information about the new health care reform. You want to make sure that your employees have insurance coverage that complies with Obamacare.
In 2013 you have the chance to sort through the information and learn more about what is required starting in 2014. This new reform is constantly changing and new information can be hard to stay on top of.
Below are some of the changes that are in the works or are newly in effect:
Exchanges
Every state will have an exchange program ready by the beginning of 2014, which would allow you or your employees to shop for different insurance plans. In the exchanges you and your employees will be able to shop for different plans, which all meet the Obamacare requirements. Information on your state exchange will be available starting October 2013.
Whether you are considered a small company (under 50 employees) or a medium company (50 or more employees) you are require to inform your employees about insurance exchanges and the implications of participating in them. There has yet to be a deadline by which you are required to inform your employees about this information.
If you are thinking about group coverage, the new regulations allows companies with 100 or fewer employers to receive plans through the Small Business Health Options Program. However, some states have opted to limit the small group market to only companies with 50 or fewer employees.
You can still keep getting health insurance plans the traditional way but from now on your small business premiums will no longer be based on the health of your employees but will only be based on their ages, smoking history, and geographic region.
The Costs
The real question on your mind is … how much is this going to cost me?
If your company has at least 50 employees and weren’t providing insurance before, you can expect the biggest jump. On the other hand large businesses (over 100 employees) will see no rise in cost per person and small businesses (under 50 employees) will actually expect a reduction in healthcare costs.
The administration expects state exchanges will reduce the cost of small-group plans while giving them the advantages of the larger companies.
Size and Requirements
Your biggest job as a small business owner in 2013 is to determine the size of your workforce as defined by the Obamacare requirements. This is important because it will determine if you are liable or exempt from costly fines and penalties.
If your company has 50 or more full time employees you could be fined at least $2,000 per employee for not providing affordable health plans for your employees, excluding the first 30 employees. You could also be fined if you do not offer coverage to an employee that qualifies for a tax credit or if your offer coverage that does not fit into regulations.
If your company has less than 50 employees, you are exempt from penalty.
New plans must provide:
- Maternity and newborn care
- Emergency services
- Mental health and substance abuse services
- Preventive care
- Prescription drugs
Right now if your company has less than 25 full-time employees and your annual average wages are less than $50,000 you are able to receive temporary tax credits if you give your employees coverage. Next year you can expect the credits to increase to 50% of your contribution to a state exchange.
