Healthcare Reform Confusing For Small Businesses

Photo of a doctor's office.

Photo Credit: Flickr/Dan Bluestein

It turns out that when it comes to the Affordable Care Act (or, as it’s also referred to, Obamacare), small businesses are having a tough time figure out what they need to do.

According to a survey conducted by the eHealth Insurance exchange, more than half of small business owners don’t understand what the “employee mandate” section of the Patient Protection and Affordable Care Act of 2010 (ACA) means for them or for their workers.

The employee mandate applies to those businesses with 50 or more full-time employees (as defined by the Small Business Administration). If you fall under this classification and don’t offer health insurance to your employees, the Affordable Care Act employee mandate requires that you pay $2,000 per year per employee after 30 employees. So, if you have more than 50 employees working for you, starting with your 31st employee you pay $2,000 annually, and $2,000 per year for the 32nd and then for the 33rd and so on.

If your business employs less than 50 people, then the health-insurance mandate does not apply to you.

Another confusing aspect of the Affordable Care Act is that of the health-insurance exchanges. For small business owners, the Small-Business Health Options Program (SHOP) is a place where you can shop for and compare health insurance plans. A similar federal exchange for lower-income individuals will become available in October of this year.