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Preparing your business for the new Affordable Health Care Act

Preparing your business for the new Affordable Health Care Act

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Chicago is home to a plethora of businesses that spans many sizes and industries, all of which may be affected by changes in health care legislation.

Small businesses in particular may have unique concerns when it comes to the new Affordable Health Care Act. Understanding exactly what this law requires them to provide to their employees, and what benefits or penalties they may be subject to is important.

The U.S. Small Business Administration offers information that can help an individual business owner learn some of the most pertinent elements of the AHCA. Some of the most pertinent elements of the act that businesses need to be aware of include:

  • Businesses with fewer than 50 full-time employees are not required by law to provide health insurance.
  • Tax credits are available to businesses that provide coverage to their employees if they meet wage and employee-base requirements and if they pay at least half of the health insurance premiums.
  • Employers are incented to promote healthier workplace environments by offering discounted health club memberships, financial benefits and more to their employees.
  • Companies that do not offer health care coverage and have a minimum of 50 full-time employees may be required to share in the costs of their employees’ health care. This provision is referred to as Employer Shared Responsibility.
  • Companies with fewer than 50 employees as well as individuals will have access to shop for affordable health care plans at a newly created affordable insurance exchange called the Small Business Health Options Program.

Additionally, Health care plans offered to employees must provide coverage for designated essential benefits as outlined by the AHCA. For some companies, there may be little change but others may use this time to institute new programs that can deliver positive results as well as ensure compliance with the law.

According to Forbes, the assessment of penalties is somewhat less defined. The federal guidelines indicate that it is the affordability of health care—or rather the lack thereof—that could result in financial consequences for employers. There is a formula that calculates the penalty payments for companies who do not provide insurance. For companies that do offer coverage, if the out-of-pocket costs of even one employee are greater than 9.5 percent of that person’s income, the company could be penalized.

Whether or not they currently offer insurance coverage to their employees, business owners should take the time to make sure they are informed about the pertinent portions of the AHCA. A little education can go a long way toward avoiding problems down the road.

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