Small Businesses Unsure How Affordable Care Act Impacts Them

According to eHealth’s Fall 2012 Small Employer Benefits Survey, small businesses are confused when it comes to the impact of health care reform. In her article Health Care Reform: Myths and Realities, author Maria Valdez Haubrich lays out the facts for small business owners unsure about where they stand when it comes to providing insurance to employees.

  • Employers with 50 or fewer full-time employees are not required to buy health insurance for them.
  • Employers with 50 or fewer full-time employees don’t face any tax penalties for not providing health insurance.
  • Those with 51-199 face $2,000 for every employee that gets insurance through an exchange, except for the first 20 who do so.
  • Health insurance exchanges are to be created in every state by 2014, which will allow employees to buy subsidized insurance even with a pre-existing condition.

So what does this mean for small businesses? It means that for the smallest firms, health care reform really won’t have an impact at all on their bottom line. Medium-sized companies, however, will be subject to the mandate and might face higher costs of doing business, which could lead to them looking for sources of financing and cash flow such as factoring.