The phase-in of the highly controversial Patient Protection and Affordable Care Act (ACA) continues in 2015 as businesses make plans to comply with the provisions of the act — or pay the consequences.
“It is important for businesses to prepare for this upcoming change,” said Mississippi Insurance Commissioner Mike Chaney. “I would suggest seeking assistance from a tax or financial professional to determine if your business is ready.”
Beginning in 2015, ACA requires large employers — generally those with 100 or more full-time-equivalent employees — to offer adequate health insurance coverage to full-time employees and their child dependents (under age 26) or face potential tax penalties.
“This requirement will also apply to businesses with 50-100 full-time-equivalent employees beginning in 2016,” Chaney said. “If a large employer does not offer proper coverage and any full-time employees are certified as eligible to receive a premium subsidy or cost-sharing reduction through the Health Insurance Marketplace, the employer may be penalized. This provision of the law does not necessarily offer the employee more choices, but it does require larger businesses to offer minimum essential coverage that is affordable to eligible employees.”
Small businesses with fewer than 50 full-time-equivalent employees are not required under the ACA to provide health insurance to their employees. While small businesses may choose to provide health insurance coverage, it is not required by law. Cheney said One, Mississippi (https://www.onemississippi.com/), the Small Business Health Options Program (SHOP) in Mississippi, is a great option for small business owners who may be interested in providing health insurance to their employees.
It isn’t just the cost of providing coverage that concerns businesses, but the amount of time and money needed to comply with the government regulations.
“My CPA bill was twice as large this year so, yes, it impacts us,” said Jane Sanders-Waugh, co founder and general manager, Professional Staffing Group. Sanders-Waugh said even though smaller companies don’t face the same mandates of providing coverage as larger companies, it is still a complex web of regulations to navigate.
“We have an expert we work with in a continuing education process to understand it at this point and to see how I can help my clients with it,” she said. “While it’s great for employees everywhere, it’s considered to be one of the biggest headaches for human resource managers around the nation. It will likely require additional staff or outsourcing expertise for their HR department.”
The larger the company, the more likely it will need additional staff. It can be complicated for companies with hourly employees to determine who is full time and who is part time. That can also change during the year.
Sanders-Waugh said it is not all negative.
“There are opportunities for clients within the guidelines of the ACA in a certain context,” she said. “Are there groups of employees who could be used differently than in the past? Could there be 25-hour-a-week employees instead of 40 hour? I think it will trigger a lot of creative employment solutions. It is not all dark. A lot of good things have come out of it. I have seen so many people helped who wouldn’t have been helped before. Personally, I support it, but sometimes it is hard for my stomach.”
Sanders-Waugh said like any other change, there will be growing pains to see how this is best used by employers and employees.
“In some cases, it can relieve employers from trying to put together benefits for small group of employees,” Waugh said. “Will it be a pain. Yes? Will it be costly? Yes. But in the long run, I think the benefits will emerge, such as people learning to use the resources more effectively and efficiently.”
The changes could help small firms recruit or retain valued employees. In the past, often people would stay at a job with a large company even if they didn’t like the job because it provided health insurance and other benefits.
“If health insurance is more readily available through ACA, that certainly will help some smaller companies to recruit and keep talent,” Waugh said. “That is one of the benefits that is overlooked. I see people every day take a job they hate because they have a benefit package or a medical plan.”
While coverage can be expensive, Waugh said she hasn’t seen it is any more expensive than the “ever increasing charges” on the Blue Cross & Blue Shield (BCBS) of Mississippi plan. She has seen coverage on the state insurance exchange for a company with six employees that is as good as BCBS.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info