Many owners nationwide may be at least somewhat concerned about the ways in which their small business insurance costs will rise as a result of the Affordable Care Act's mandates for providing coverage in a number of circumstances. However, the U.S. Small Business Administration recently issued new guidance designed to help ease the transition for many such companies.
The SBA's new guidelines showed just how the mandates related to small businesses will affect them, depending upon how many employees they have, according to a report from the Milwaukee Business Times. For instance, there are healthcare tax credits that are designed to help smaller companies better deal with these burdens, particularly if their employees are considered to be either low or middle income. Since 2010, the federal government has been granting tax breaks of up to 35 percent to companies that have fewer than 25 workers making an average of less than $50,000 and which contribute 50 percent of their insurance premiums or more. Once the ACA's new coverage rules take effect at the start of next year, that credit will rise to 50 percent for all companies participating in the Small Business Health Options Program (SHOP).
That program in particular might prove beneficial to companies in other ways as well, the report said. Currently, small business owners typically pay about 18 percent more for relatively similar health insurance plans than do bigger companies, but SHOP is designed to level that playing field somewhat. Beginning in 2014, companies with 50 employees or fewer will be able to participate in SHOP's insurance marketplaces as a means of bringing down their prices and potentially giving them options for better care for workers. The exchanges will also open up to companies with as many as 100 employees by 2016.
In addition, small businesses could also see more rebates from insurance companies which do not spend at least 80 percent of money paid into premiums on medical care, the report said. The ACA mandates that this be the case, and any insurers that violate this aspect of the law will be required to give companies money back to make up the difference.
Small business owners have to prepare for many different types of insurance needs in the coming year, including not only healthcare costs, but also those for workers' compensation and general liability insurance.