ObamaCare and The Business Fare

BUSINESS STRATEGY FOR MEDICAL CARE..

Almost half of America's uninsured are small business owners, independent contractors, employees, or their dependents because independent insurance plans are exorbitantly priced.  Unless there is an option to be a part of a professional group, trade group, or special-interest group, the age, location, and preexisting condition factors can cost a small business and independent workers nearly the entire profit. Larger corporations with more than 50 people get group discounts that enable them to contribute to health benefits at lower costs and use that as leverage when hiring employees.

For the small business and independent workers group, ObamaCare introduces the Small Business Health Options Program (SHOP) as part of every state's health insurance market for group health plans to be purchased by companies employing less than 50 full-time workers.  In 2016, the limit will be raised to 100.

But what does ObamaCare, the act that goes into effect today regardless if the government is shutdown, mean in general for all businesses?  It's good and bad based on the number of full-time equivalent employees (FTE) and their annual wages.

1)  If there are fewer than 25 FTEs with an average annual wage below $50,000, tax credits will be provided to help pay for employee premiums.
2)  If the business makes over $250,000 in profit, there will be a .9% increase due on the current Medicare Part A tax.
3)  If employers with over 50 FTEs yielding an average annual wage above $250,000 don't purchase health insurance for their FTEs, a penalty will be assessed by 2015.  Companies barely hitting this limit will be exempt from the fee on the first 30 full-time workers. Nonetheless, the employer mandate, a written notice, must be provided to employees informing them that a) they may be able to obtain insurance based on their income at a lower cost through private insurance and b) purchasing insurance through their states healthcare exchange may reduce or eliminate the company's contribution to their health benefits.

Clearly the smaller the business the better the tax breaks.  However, there will be executives enticed to reduce costs by modifying the normal 40 hour work week for some FTEs to that of part-time status or reducing the average annual wage by furloughing higher paid individuals and possibly bringing them back in as contractors or hiring more "temp workers" rather than employees.  But some of that is just good business anyway after learning how to run lean in a down economy.  Whatever category your business falls, the fare can be cheaper or costly but requires planning.

Posted in: 2013 government shutdown,and smallbusiness,Government Shutdown,ObamaCare,small business expert,Temeko Richardson,The Truth about Obamacare