While many of the regulations created by the Affordable Care Act are attended to address the healthcare plans offered by large companies, some of its mandates affect small businesses in significant ways. As such, there are a few different reasons why the leaders of small businesses should be aware of how Obamacare will impact their operations.
2016 ACA changes had a big impact on small businesses
The ACA update will have the most significant impact on business owners in 2016 because the definition of what constitutes a small business has changed. As of January 2016, a company that employs more than 50 full-time employees is now considered an applicable large employer and is, therefore, subject to Obamacare’s mandate. It’s also worth noting that the employers’ shared responsibility coverage threshold has been raised from 70 percent to 95 percent of its workers and their dependents. These changes will meaningfully impact the bottom lines of many mid-size firms and small businesses, particularly in regards to when and how they plan to expand.
New healthcare laws may necessitate a structural overhaul
In addition to affecting how companies make their expansion considerations, healthcare law should also prompt small business owners to consider how their organizations are structured. For example, if a firm is doing particularly well and needs to bring in new staff to keep up with demand, they may want to consider eliminating some of their full-time positions. This Zenefits piece delves into how companies can increase their profitability without hampering their productivity, or substantially increasing their labor costs by hiring more part-time and seasonal workers.
Healthcare and hiring
Out of the six million plus businesses that currently operate in the United States, only three percent employ more than 50 people. If your company is part of the 97 percent, it’s important to understand that your business is not required to offer your employees health insurance, and you will not pay a financial penalty for not doing so. However, just because you don’t have to doesn’t mean that you shouldn’t. By making health benefits a part of your compensation package, you can make your company more appealing to your potential hires, especially among work-life balance valuing millennials.
This article was written by Mario McKellop for Small Business Pulse