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Small businesses need to prepare for the ACA

By 2016, small businesses with 50 to 100 employers will be mandated to provide health insurance for their employees.


According to Accounting Today, Mark Dietrich, former chair of the American Institute of CPAs’ National Healthcare Industry Conference Committee, said at an American Institute of CPAs’ online conference that these businesses will be moved into the “Small Group Market.” If you own a business with the target number of employees, Dietrich suggested that you meet with your tax consultants to prepare for the new requirements.


Once your business is elevated into the newer group, you will most likely be paying higher premiums.


“It’s cheaper to insure 200 people under a single contract than it is to insure 40 groups of five under 40 contracts, or 200 individuals,” Dietrich said.


He stated that getting ahead of the changing tides will help companies avoid unwanted surprises in 2016.


Higher premiums may come in the future
The purpose behind expanding the Small Group Market is to help offset expected losses and create growth for coverage providers. However, Dietrich noted that it is likely premiums will increase due to the ACA’s deductible limitations and provision that prohibit the denial of coverage to individuals with pre-existing conditions.


Furthermore, there is a chance that premiums will see even more of an increase if states decide to combine the Small Group Market and individual groups.


Avoiding additional costs
National Review Online reported that organizations may be able to get around higher premiums by making their business a self-insured company. Dietrich said that such a move is not something he would usually suggest to companies with fewer than 100 employees. Yet, there are a number of insurance companies that have services to help with complying with some of the the ACA’s requirements.