Q: How will the new healthcare reform law affect small businesses?
Employers with fewer than 50 employees will be able to purchase coverage for their employees through the exchange if they want. However, if they so choose, these businesses can continue to purchase health insurance coverage outside through traditional methods outside of the exchange, such as through an insurance broker.
Employers with more than 50 full-time employees are required to provide health insurance to their employees. If they do not, they face financial penalties. Small businesses (under 50 employees) do not face these same penalties. In fact, in some cases, the federal government provides tax incentives to small employers to cover the expenses of purchasing health insurance for their employees.
For small businesses, one of the advantages of purchasing coverage through the exchange will be the choice option. Beginning in some states in 2014 and in all states in 2015, small businesses will be able to simply advise their employees how much they will contribute to health insurance premiums. Then, the employee can purchase any option available in the exchange. The exchange handles distributing the money to the plans, which means small businesses can offer more options to their employees and decrease administrative fees.
Next question: How will healthcare reform be paid for?
Meet the experts to answer the commonly asked questions to help you understand the Health Care Exchange
Linda V. Tiano
Member of the Firm at Epstein, Becker, and Green in Washington, DC and New York
Senior Vice President of Strategic Planning and Business Development at the University of Alabama at Birmingham Health System.
Director of Health Care Reform at Priority Health in Michigan.