Healthcare Options for Small Businesses are Limited until 2015

The Obama administration recently verified that part of the 2010 health-care law geared toward helping small businesses offer insurance to their employees will be pushed off by a year.

The department overseeing Medicaid and Medicare announced that the launch of the federal SHOP Exchange, an online marketplace where businesses with less than 50 workers would be able to buy insurance for their employees and get a tax credit, would be on track for Oct. 1. However, the initial expectation that employees would be able to choose from a variety of plans has been quelled as they will only have one option for a plan. The full selection of healthcare plan options won’t be available until 2015.

The postponement recommended earlier in the year upset some business supporters and provoked questions about whether the administration was lagging on the implementation of the healthcare law.

While large companies will be obligated to provide insurance starting next year under the law, it will be optional for those with less than 50 employees. John Arensmeyer, head of the Small Business Majority, an advocacy group that supports the health law, said the news would probably deter some companies from offering insurance to their employees.

States that already established their own health insurance exchanges won’t be impacted by the delay.

Crowdfunding: The Answer to Funding a Small Business?

Money is always a concern when building your business or when you’re looking to keep it in the black. Crowdfunding is defined as the “practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” But is it the answer to helping your small business?

For a select few, it could be.  Rather than having to look to banks or private investors to get the capital needed to support your company, crowdfunding opens up your capital-seeking channels to include everyone and anyone. With President Obama’s Jumpstart Our Business Startup Act, (JOBS), it will be easier for startup businesses to go this route to raise funds than to attempt to jump through many hoops to get that funding. The bill basically states that business startups looking to grow can turn to online investors to gain the needed money to succeed.

Websites like Kickstarter, RocketHub, and Indiegogo let companies showcase their businesses to a wide audience and provide a crowdfunding platform where anyone can safely invite others to donate to their business or donate money. Each site gives businesses or project designers a place to create a profile consisting of relevant information about the project or business venture as well as establish a fixed financial goal of what they are hoping to raise within a set number of days. Rather than the customary investors most businesses seek out to obtain funds, crowdfunding is exactly what it sounds like – funding by the crowd, or general public. Backers who donate money can pledge a minimum sum to the fund and may receive a reward for their involvement.

However, not all companies who seek out money via crowdfunding actually receive the capital they’re hoping for, and in fact, the majority don’t. “The assumption is that everyone gets funded, but nothing can be further from the truth,” says Chance Barnett, CEO of Crowdfunder, a social networking site for investors and companies trying to raise money. “A majority (of companies seeking funding) aren’t companies that are deserving of capital today.”

The JOBS Act says that non-accredited investors can invest in a business and that same business can then raise up to $1 million a year without being obligated to register with the Securities and Exchange Commission (SEC). Since the JOBS Act has passed, websites devoted to helping companies connect with individuals looking to donate money to their crowdfunding efforts have seen their numbers rise to an all-time high.

Health Care Reform Will Lead to Stricter Workplace Wellness Programs and Harsher Penalties

The Obama administration recently announced the final rules on employee wellness programs under the Affordable Care Act (ACA). The U.S. Department of Health and Human Services issued the regulations, which were enacted under the ACA on May 29. The program allows employers to increase the incentives they give workers to get them into a wellness program or other means of promoting healthier choices and behavior. It supports workplace health encouragement and deterrence as a way to decrease chronic sickness, better health, and regulate growth of health care costs while making sure workers are safe from unfair underwriting methods that could lessen benefits based on health status.

Employers also get clarity on applying penalties for unhealthy employees. Under the new regulations, employers have greater flexibility to charge higher premiums to workers who do not meet certain health goals.

According to a recent survey by the Midwest Business Group on Health, more than 80% of the country’s biggest employers are looking to implement a penalty and reward system to encourage their workers to get healthy.

The rules support “participatory wellness programs,” which are typically accessible no matter the individual’s health status. Included are programs that compensate employees for the cost of membership to a gym or fitness center, rewards for those who attend a free monthly health education meeting or who undergo a health risk assessment.

The final rules protect users by demanding that health-contingent wellness programs be logically planned, equally available to all similarly situated people, and that they accommodate suggestions made at any time by an individual’s doctor founded on medical appropriateness.

Due partially to the ACA, 82% of almost 100 global and national businesses are lowering premiums and offering gift cards for healthy living or charging higher co-payments and fees for poor health choices like smoking. The final rules will go into effect starting on or after Jan. 1, 2014

Read the official news release from the U.S. Department of Health & Human Services here: http://www.hhs.gov/news/press/2013pres/05/20130529a.html

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