Business Insight: Helping small businesses navigate Obamacare
Jess Griffiths, an attorney at the Salt Lake law firm of Jones Waldo who leads its Healthcare Law Practice Group, says the Affordable Care Act needn't be a minefield for small businesses.
What are the aims of the Affordable Care Act?
Its main goals are to make affordable, quality health care available to everyone, establish greater consumer protections, create more consumer options on coverage and bring everyone into the health care system. Historically, small businesses and individuals have had a hard time finding affordable and comprehensive coverage because of the way insurance is underwritten. They were simply viewed as more risky. Additionally, a segment of the population consistently takes the risk of not having insurance for any number of reasons, including cost, poor coverage options or an inability to obtain coverage because of medical history. The ACA attempts to address those and other issues.
What are some of the changes already in place?
Pre-existing condition exclusions for children are gone (soon for everyone). Now, parents with sick children have significantly more security and options. Also, adult children may now stay on their parents' insurance through their mid-20s. Well visits for children and pregnant women are covered at 100 percent; this means there is no out-of-pocket cost to the patient, regardless of deductible limits and co-pays. Lifetime maximums on insurance are gone. There also are added tax benefits to small businesses that choose to provide insurance for their employees.
What are some of the major misconceptions?
Myth: The ACA will put small business out of business.
Fact: The ACA does not require small businesses under 50 full-time employees to provide health care to their employees. The ACA does, however, give small business better options for health coverage if the owner decides to do so. Businesses with more than 50 full-time employees can choose not to provide insurance, although there is a penalty system in place for those employers. There are also tax benefits for employers with fewer than 25 employees if the employer wants to provide insurance. Those benefits, in part, depend on the average salary of the employees.
What deadlines do small-business owners need to know about?
Employers already must provide a Notice of Summary of Benefits and Coverage. This applies generally to any coverage that is offered. Employees must receive clear and comparable information regarding benefits and coverage. Later this year, employers will be required to provide a notice regarding the availability of the health insurance marketplace (exchanges). The original deadline for this was March 1, but it will be reset in the summer or early fall. In addition, open enrollment for small businesses wishing to buy insurance from the marketplace begins October 1, through the end of the year.
Does the ACA require small businesses to buy health insurance, and where can they obtain insurance?
Again, no. If you have fewer than 50 full-time employees (and full-time employee equivalents), you are not required to offer health insurance to your employees or pay penalties. However, if owners want to provide insurance, they will be able to shop for it on the marketplace, called SHOPs. Open enrollment for the small-business insurance marketplace, formerly called an Exchange, starts October 1 for coverage beginning January 1, 2014. The Web portals for these exchanges should provide a good resource for employers to compare and shop for insurance.
Dawn House Jess Griffiths, attorney