A result of the Affordable Care Act, changes in health insurance are far-reaching, affecting individual Americans, corporations, federal agencies and the like. Small businesses are no exception, as the new federal guidelines may mean wide-scale, comprehensive changes to the way they do business. Not only will the changes likely affect the bottom line, but they’re also likely to impact employees in significant ways, too.
For some small businesses, the Act will mean access to health care for employees that was previously not possible due to financial constraints. For others, it may mean steep increases in health care costs, and even perhaps prohibit a business from directly offering health care. Instead, employees will turn to health insurance exchanges set up by the State of Ohio.
Now that health insurance for small businesses have expanded, they’re in a unique position to revamp their programs to benefit the bottom lines and improve employee health care. Here are a few ways experts believe the Affordable Care Act may ultimately benefit small businesses:
- The plan includes a Small Business Health Option Program (SHOP), which allows smaller employers access to competitive health plans, similar to what big businesses can offer. The SHOP marketplace offers small businesses the opportunity to pool buying power. In effect, the pooled purchasing power gives small businesses the leverage that big business has, and allows them to secure lower-cost policies for their employees. This will give small business a competitive edge when it comes to recruitment and hiring, too.
- The SHOP marketplace offers small businesses tax credits for participating in their programs. Currently, businesses may qualify for a 35 percent tax break to help provide health care for employees. In 2014, the tax credits increases to 50 percent.
- Administrative costs may also drop when participating in the SHOP program. That’s because the federal government is taking on part of the responsibility for managing health care insurance information, making it easier to compare policies and coverage through the marketplace program. As a result, small businesses won’t have to front the costs of dedicated personnel assigned to the task.
To discuss the insurance options your small business has under the Affordable Care Act, find a qualified insurance agent in your area.
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