Affordable Care Act and Small Businesses: What’s the Impact?

UntitledThe Affordable Care Act is certainly going to have a significant impact on individuals, but there are also many facets of the law that will help small businesses. After the recent economic downturn, small businesses have received a lot of incentives and tax credits to help them succeed and hire more employees. The ACA is no different, and gives some flexibility for small businesses to adjust to the upcoming changes under the healthcare reform.

First of all, truly small businesses will be able to take part in Affordable Insurance Exchanges. What this means is that companies with less than 100 employees can engage in a marketplace to determine the most affordable and effective healthcare plans. Ultimately, this gives a lot more options to both employers and employees. This is a real step up for small businesses, which essentially get to engage and consider the plethora of options and lower costs that have previously been the stronghold of larger companies.

The small business tax credit is also going up, too. In 2014 the credit will be increasing to 50%, making the cost of insurance less expensive. If you’re curious about whether your small business will qualify for the tax credit, check out http://www.irs.gov. Right now, the tax credit is for businesses up to 245 employees with a pay average below $50,000 and provide health insurance as a benefit, your business can get a credit of up to 35% to assist with that insurance cost.

If your business provides health coverage for retirees that are between the ages of 55 and 64, there is financial assistance through the Early Retiree Reinsurance Program, another method of cutting costs.

Bear in mind that those small businesses that want to keep their insurance plan the opportunity to do so. These are considered “grandfathered” under the Affordable Care Act. If a plan is indeed grandfathered, the employer is not required to have a plan with preventative services without cost sharing, essential benefits, or a plan that allows direct access to an OB/GYN without a referral. Those plans that do not fall into the grandfathered category will be required to keep a minimum number and type of benefits by the year 2014.

It’s expected that further implementation of the ACA will continue to incentivize businesses and help make healthcare affordable and achievable.

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