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Five Ways the Affordable Care Act Helps America’s Small Businesses

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Five Ways the Affordable Care Act Helps America’s Small Businesses

By ngoriel, SBA Official
Published: August 15, 2013 Updated: September 10, 2013

NOTE: This blog is by Ari Matusiak, special assistant to the President & director of private sector engagement and first appeared at Whitehouse.gov on August 14, 2013.

Small businesses are the backbone of our economy, and for the 28 million small employers across the country, healthcare is a major concern. The Affordable Care Act provides benefits and opportunities to small businesses that will help increase access to affordable coverage options.

Here are five key ways the Affordable Care Act can benefit small employers and their workers:

1.      SHOP Marketplaces: Currently, small businesses face premiums that are on average 18% higher than large businesses. On October 1, 2013, the new Small Business Health Insurance Options Program (SHOP) Marketplaces will be open for businesses, and small employers in every state will be able to shop for health coverage on a competitive marketplace, that brings unprecedented transparency to the market and gives small businesses the same purchasing clout as big businesses.

2.      Reducing Administrative Complexity: SHOP Marketplaces include web portals that provide standardized, easy-to-understand information that will make comparing and purchasing coverage easier, and will simplify the administrative challenges that businesses often face when offering plans. Visit www.HealthCare.gov to learn more about the SHOP Marketplace and to get ready for open enrollment.

3.      New Tax Credits: The small business tax credit helps small businesses afford the cost of healthcare coverage for their employees, and is already helping qualifying small businesses offset the cost of insurance by up to 35%. In 2014, this tax credit goes up to 50% and is available to qualified small businesses who obtain coverage through the SHOP Marketplace.

4.      Improved Risk Pooling: The new SHOP Marketplaces will allow small groups to pool risks and reduce administrative complexity, thereby increasing their purchasing power and reducing costs for small businesses that want to provide coverage to their workers. Business can enroll starting on October 1, 2013, through their brokers, or directly through the SHOP Marketplace. Stay connected to the latest information on the Marketplaces by going to www.HealthCare.gov

5.      Workplace Wellness:  The Affordable Care Act creates new incentives to promote workplace wellness programs and encourages employers to take more opportunities to support healthier workplaces. Effective for plan years after January 1, 2014, final rules allow the maximum reward to employers using a health-contingent wellness program to increase from 20 percent to 30 percent of the cost of health coverage, and the maximum reward for programs designed to prevent or reduce tobacco use will be as much as 50 percent.

To help provide small business owners with the resources and information they need, the Obama Administration recently launched Businesss.USA.gov/healthcare, a one-shop where employers of all sizes can go for customizable information about how the law impacts them, based on the size, location and future plans for offering coverage. And, the Department of Health and Human Services launched a call center specifically to serve the needs of small businesses interested in the SHOP Marketplace. This call center (1-800-706-7893) is a new resource to help business owners get information to make the right decision for their bottom line and their employees. It’s open Monday-Friday from 9 AM- 5 PM, with representatives available to help in English and Spanish.

The Small Business Administration has also teamed up with Small Business Majority to offer a weekly webinar series designed to educate small business owners about what the healthcare law means for them. To sign up for a weekly Thursday Webinar before open enrollment starts on October 1, 2013, visit:http://www.sba.gov/community/blogs/community-blogs/health-care-business-pulse/new-dates-affordable-care-act-101-webinars

About the Author:

Natale Goriel

SBA Official

Hi, my name is Natale and I'm serving as a Moderator for the SBA Community. Our goal is to continually improve this site to meet your needs, so we appreciate your feedback and participation.

Comments:

There are two data points I have come across that concerns me 1) ACA’s employer mandate incentivizes smaller companies to shift their workers to part-time status because employers are not required to provide health coverage to part-time workers. (the good news is that this mandate has been delayed until 2015.) 2) Though DOL and SBA are organizing online/offline events, yet many small businesses across the nation are either not aware or lacking in information/guidance about what is expected of them under the law. This may create compliance issues once important deadlines are missed.
I agree on your part-time employee point. Companies are slashing workers hours in order to not have to provide access to insurance. More than one person in the administration has claimed that this is not the case. I believe the administration has it's head in the sand on many negatives where the ACA is concerned.
Can you tell me more detail the impact of SHOP Marketplaces inthis year?
It may be worthwhile for you to join one of the Affordable Care Act 101 webinars to learn more about the SHOP Marketplace. A question and answer period will follow each of the webinars in case your question was not addressed or you have any additional questions. 
You making me confuse when I read, "New Tax Credits" In 2014, this tax credit goes up to 50% and is available to qualified small businesses who obtain coverage through the SHOP Marketplace, WHY?
It may be worthwhile for you to join one of the Affordable Care Act 101 webinars to learn more about the SHOP Marketplace. A question and answer period will follow each of the webinars in case your question was not addressed or you have any additional questions. 
Are there recordings available for the webinars?
I like the,"Workplace Wellness" point most. Since its hard to fix the small business to a better way for long time. But now ACA make good changes to make the small business employer to live better in future.
I have heard pros and cons. With the Affordable Health Care Act, do you think we will see an increasing reluctance for small business owners to hire full-time employees and restrict employees' hours to (30 hours or less) in order not to be subject to the health care mandate?
After passage of the Affordable Healthcare Act, our insurance went up 209% to over $1,100/mth for two healthy adults because we were using an HSA, which was the best insurance available but which also makes AHA less likely to fly. I was told I could keep my insurance. That was untrue. We had to switch and we still pay 175% of our former premiums, which used to have a $4,000 deductible. Now we have a $7,000 deductible, which means that effectively, we have no health insurance except for catastrophic events, at absurdly high monthly rates. The SHOP marketplaces you are so excited about force us to accept an "HMO only" option - meaning we can no longer choose our health care professionals. If they do prove to be convenient and inexpensive (I have doubts about both), they are will only be so because they are such bad and intentionally limited options. But now they are nearly the only options. Cheap doesn't make for good. Anybody can sell a cheap hamburger, but a good steak will cost more. You're offering nothing by cheap burgers. Why would we not opt out entirely and pay the $65 penalty? It seems the only sensible option at this point.

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