The Affordable Care Act has changed the landscape for both individual and group health insurance. Most Americans have coverage under an employer group program, and would like it to continue that way. Employers are wondering if they can afford to comply with the new law. What does the passage of the ACA really mean for your business and your employees?
In a nutshell, adhering to the law means getting comfortable with change. As the recent conflicting court rulings demonstrate, the true implications of the ACA are still being determined. However, while we watch the details flesh out over time, businesses and individuals still have to work within the current law.
Right now, businesses with 2-50 employees are not required to offer their employees health insurance, but employees are required to have coverage or face fines. Businesses with 51+ employees are required to offer their employees a group health plan, or face fines. Fines are based on the number of Full-Time Employees (FTEs).
Therefore, the ACA requires decision-making by both you and your employees. As a business owner, you must decide if you are going to offer your employees a group health plan. If you do, you avoid potential fines and force your employees to be covered under your plan. If you opt out of offering health benefits, you face being fined and force your employees out into the health exchanges, otherwise they will be fined. Indiana does not have a state health insurance exchange, making your employees subject to the rules regarding the federal exchange.
Higher health insurance rates are also a fact now with the passage of the ACA. Under the law, the health insurance plan providers are required to insure everyone at the community rate. This policy means insurance companies are no longer allowed to price their plans based on the health risks of the covered individual. To ensure they can cover the costs of expensive individuals, the associated costs have been spread over all individuals, making prices higher overall.
Employer’s costs of compliance have also increased, through the time spent deciphering the legal and administrative aspects of the law. Businesses are evaluating the current structure of their workforce, such as examining the implications of hiring full-time and part-time employees. They are making hard decisions about their ability to afford continuing the benefits they offer their employees currently.
Fortunately, there are ways to manage the complexities created by the ACA. Services like Professional Employer Organizations (PEOs) and Association Health Plans can be cost-effective solutions for businesses. We can help you develop the best scenario for your company. Give us a call at 317-663-4138 or send us an email for more information.