The ACA and How it is (and Will) Impact Your Business

The Affordable Care Act (ACA) has been impacting businesses of all sizes since it was passed into law in 2010. While it’s great for employees everywhere, it’s considered to be one of the biggest headaches for human resource managers around the nation.

The requirements of the ACA in terms of reporting affordable benefits to the Internal Revenue Service took effect in 2014, yet many companies are still trying to figure out the complex aspects of it. Whether you own a large or small company, the impacts of the ACA both now and in the future will impact how you perform daily operations.

Here we will discuss in general how the ACA will impact your company for the better and for the worse.

Current Business Impact of the Affordable Care Act

Almost all Americans are required to have health insurance under the ACA or else they could face a penalty. Right now, many small business (less than 50 full-time employees) were grandfathered in if they had already offered their employees health insurance coverage. This means that the companies could keep their current plans and are subjected to fewer regulations of the ACA.

For small business that were not grandfathered into the program, they will be required to provide their employees with some form of coverage. The new plans are labeled as bronze, silver, gold and platinum. The new plans will also cover a set of benefits, which are referred to as Essential Health Benefits. This began earlier in the year.

With the passage of the ACA, insurance exchanges were created. These are in almost every state and the District of Columbia and they allow people to purchase health coverage based on their individual needs. Employers can purchase health coverage for their employees using either the exchange in their state or the market outside of their state’s exchange. If they purchase outside of the exchange they will still be subject to the reforms created by the ACA.

ACA Penalties Take Effect in 2015

Beginning in 2015, penalties will be assessed to companies that do not provide their employees with affordable health insurance. Small businesses that employ fewer than 49 full-time employees will not be subject to these fines. However, companies that have 50 or more full-time (or equivalent) employees will be fined $2,000 per employee, excluding the first 30 employees, if affordable health insurance coverage is not offered by the company if the employees work an average of 30 or more hours per week.

In order for companies to avoid being penalized, they must provide their employees with coverage that pays for 60 percent of the value of the cost of the benefits offered by the company. The premium for the employee must also not exceed 9.5 percent of their household income, which means the coverage provided by the company must be affordable. If this requirement is not met, the employee could be offered a tax credit to purchase coverage through the exchange in their state.

These quick takeaways on the Affordable Care Act only brush the surface of how the Act will impact businesses. Work with your executive team, an ACA consultant, lawyer, and staffing partner to evaluate how the Act will impact your business specifically and the options your company faces. For assistance with your staffing needs now or in the future, contact the recruiting team at Professional Staffing Group. We welcome the opportunity to work side-by-side with you as you wade through the ACA. We look forward to hearing from you!