Details on what will be required of small businesses under the Affordable Care Act were provided to area employers during a seminar held by the Tennessee Small Business Development Center at Cleveland State Community College.
While the presenter from the Small Business Administration stuck to the facts of the act, those in attendance were unanimous in voicing discomfort with the new rules.
Jacqueline Merritt, economic development specialist with the U.S. Small Business Administration, admitted the new regulations can be confusing.
“It gets easier,” she said. “The more you read these, the easier it gets.”
Merritt said small businesses have long reported their No. 1 concern has been access to affordable health care.
“Small businesses providing health care to their employees usually pay 18 percent more than their larger counterparts,” she said. “The ACA is going to lower the premium costs and increase access to affordable health insurance.
She said prior to the act there were too few choices, unpredictable rate increases, rate discriminations and waiting periods or no coverage for individuals with pre-existing conditions.
“Starting in 2014, insurance companies can’t charge higher rates or coverage denials for chronic or pre-existing conditions,” Merritt said. “They can’t practice rate discrimination and will pool risks across small businesses that create larger pools like large businesses.”
She said assistance to small businesses is already available through tax credits.
“Since 2010, eligible small businesses can get tax credits worth up to 35 percent of their premium contributions,” Merritt said.
She also noted that approximately 200,000 employers have already claimed the credits each year it has been available.
Merritt also described the new Small Business Health Options Program — SHOP — that will be available at the first of the year.
“Employers who use SHOP will be eligible for a 50 percent tax credit,” she said.
That credit will be for small employers with 50 or fewer full-time equivalent employees.
Merritt also said in 2015 there will be additional employer-shared responsibility provisions, but she added most small businesses will be exempt.
“The act exempts all firms that have fewer than 50 employees, and that is nearly 96 percent of all firms in the United States,” she said.
She described two scenarios on how the employer would be required to make payments toward the ACA.
If coverage is not offered to at least 95 percent of full-time employees, the employer would have to pay $2,000 a year, times the number of full-time employees, minus 30.
That means a company with 50 full-time employees would pay 20 times $2,000 for a total of $40,000.
Should the coverage available be either unaffordable or not meet the minimum value standard of covering at least 60 percent health care costs, the formula to figure a company’s payments would stay the same, but the amount used to figure that payment would increase to $3,000.
“As an employer it gets to a point you can’t do it,” one businesswoman said. “At what point does the government say ‘You will do this?”
“Jan. 1, 2015,” Merritt answered.
“I’m just seeing a lot more regulation and costs,” the businesswoman responded. “There is no way this is going to be easier, simpler or cheaper. There will be a lot more administration.”
“It seems like the government’s being a bully,” another businessman commented.
Both comments were seconded by all six of the seminar’s attendees.
Merritt provided three websites that can be helpful to small businesses attempting to navigate the new health care act.
Those are www.Business.USA.gov., www.sba.gov/healthcare, and www.healthcare.gov.
“A healthy workforce is a more productive workforce,” Merritt said.