More Small Business Owners May Need to Brush Up on ACA Rules

The date by which the Affordable Care Act’s consumer coverage mandate will go into effect is rapidly approaching, but before that January 1 deadline, there are a few other notable things that will have to take place. This includes businesses of all sizes notifying their workers about the availability of the ACA’s exchanges, which open for enrollment in less than a month. However, many companies may not be ready.

As with the open date for the exchanges themselves, businesses both large and small are required by law to notify employees about the existence of these marketplaces by October 1, in writing, according to a report from Benefits Pro. However, a number of studies show that companies are not up to speed with the rule, and many simply may not even know that the obligation exists. If companies do not notify their workers of the exchange options that will soon be available to them, they will face fines of $100 per worker on their payroll per day they go without providing notification.

“The notice must be provided in writing and designed so that an average employee can understand it,” Pershing Yoakley and Associates, a business consultancy, recently wrote, according to the site. “The communication must include information regarding the existence of a new (insurance) marketplace, as well as contact information and a description of the services provided by the marketplace.”

Pershing Young further added that companies are required to alert employees of their potential eligibility for federal tax credits when purchasing qualified health plans through the exchanges, the report said. However, they must also be made aware that if they sign up for those plans, rather than the ones which may or may not be offered by the company, that they might lose out on the employer contributions they may currently enjoy, as well as potentially no longer being able to exclude that contribution from their federal income taxes.

Awareness lagging in general
Of course, this lack of knowledge among small businesses in particular may not be all that surprising to experts, as numerous studies have likewise shown that the average person is mostly unaware of the coming health insurance exchanges. Moreover, those that are aware of the law itself might not know about the exchanges and what they could mean for those worried about their health insurance options and costs, and what they will need to do to qualify for coverage through the exchanges.

In addition, it’s worth noting that in a number of states which have opted to run their own exchanges, rather than letting the federal government do it for them, exchanges specifically for small businesses may be available to companies as well, as a means of helping to reduce costs. However, the federal business marketplaces have been delayed by a year due to implementation issues, and will therefore not be available to companies in any other states until January 1, 2015. At that point, they will be required to offer their employees at least some kind of health insurance coverage, but currently there is no such rule in place.

Companies looking to reduce their small business insurance costs may want to shift their focus from health coverage to other policies that can be quite costly. For example, seeking out more affordable options when it comes to workers’ compensation and general liability insurance coverage may help to give companies some added flexibility when it comes to addressing potentially growing healthcare costs. Further, owners may want to do more to educate themselves about their obligations under the ACA, as it may never be too early to start preparing.