Louis Balbirer of Kaufman Rossin writes a guest blog post for NetMinder about changes related to healthcare reform. This is the second post in a two-part series discussing opportunities and challenges of the Affordable Care Act. The first part of this series focused on large businesses.
In the four years since the passage of the Affordable Care Act (ACA), there have been a number of changes that can make it difficult for small businesses to interpret their responsibilities under the law.
At the latest C-Suite Breakfast Series, co-sponsored by Kaufman Rossin and Vistage, a panel of experts discussed changes for small and large businesses brought on by the Affordable Care Act. Specifically, panelists told us what’s better, what’s worse and what’s ahead for small business owners.
What are some opportunities for small businesses?
Small businesses, defined under the healthcare law as having 50 or fewer full-time equivalent employees, are exempt from many ACA requirements. The Affordable Care Act presents many small business owners and their employees with opportunities for tax credits, lower insurance rates and more extensive coverage.
The following are some of the ways the ACA could benefit smaller businesses:
- The Federal Small Business Health Options Program (SHOP) marketplace allows small business owners to control the coverage they offer to employees and the premiums they pay for coverage.
- According to the panelists, the quality of insurance coverage and healthcare are expected to increase because the Affordable Care Act mandates a broadened scope of coverage for certain conditions that were previously uninsured.
- The lack of penalties for dropping insurance and the availability of the Exchange for employees make it easier for small employers to save by choosing not to offer health insurance for their employees.
- Additional delivery systems allow employers to choose how they offer insurance to their employees. SHOP, the Marketplace and private exchanges allow employers to veer from the traditional model (or continue with it) when selecting health insurance options for their business.
- Small businesses with 25 or fewer full-time equivalent employees are eligible for a maximum 50% tax credit if they pay premiums on behalf of their employees enrolled in a qualified healthcare plan through SHOP.
What has the Affordable Care Act made more challenging for small business?
Although they are exempt from parts of the healthcare law, small businesses still face some challenges as a result of the ACA.
The following have been made more challenging since the passage of the Affordable Care Act:
- Employers must participate by buying and paying SHOP fees even if only one employee participates in an insurance plan.
- Some small business owners will need more resources (including more employees) to properly comply with the tracking and reporting requirements under the ACA.
- Some employers are discouraged from hiring because they do not want to have to comply with the pay or play mandate required of businesses with more than 50 full-time equivalent employees. Employees who work 30 or more hours per week are considered full-time under the ACA.
What’s ahead for small business owners?
Small business owners should prepare to comply with the upcoming reporting requirements under the healthcare law and consult their broker and accountant with any questions, including how ACA-related tax changes may affect their tax bill.
I spoke with Joy Batteen, director of human resources at Kaufman Rossin and a panelist at the C-Suite Breakfast Series, about important next steps for small business owners.
“If a small business is considering hiring a broker, but is concerned about the cost, now is the right time to make that move,” said Batteen. “Hiring a knowledgeable broker – someone you can trust – makes dealing with ACA changes much easier. The law will affect different employers in different ways; the most important thing businesses can do is be prepared.”
Louis Balbirer, CPA, is a director of tax services with Kaufman Rossin, one of the top CPA firms in the U.S He has 20 years of experience providing tax and accounting services to clients and can be reached at email@example.com.