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Copy of FBLA Presentation
Transcript of Copy of FBLA Presentation
Patient Protection and
Affordable Care Act
How will the Affordable Care Act’s rules, costs, and tax implications impact small businesses in the community?
Effects on Employers
Business size does make a difference on how the law applies to employers. This can be categorized into the following:
On the other hand, businesses with 50 or more employees are subject to all the rules of the act, including its penalties for noncompliance.
What is the Patient Protection and Affordable Care Act?
Otherwise known as Obamacare, this is a health care reform act aimed to help the millions of Americans that can't supply themselves with health insurance. Its purpose is to expand Medicaid and Medicare and offer assistance to Americans that are 400% below the Federal Poverty Level.
What is the current relationship between small businesses and healthcare reform?
As it stands now, the Affordable Care Act is a benefit for small business leaders. The positive results outweigh the negative costs that come with the implementation of the law.
Businesses with less than 50 employees
Employers with less than 50 employees are not penalized for not providing coverage for their employees.
Premiums and deductibles are expected to raise over the next 5 years. This would prove to be potentially harmful for these types of businesses. However, under the ACA the federal government can limit the rates insurance companies provide, as to try to protect businesses from inflated prices.
Employers will be forced to pay a $2000.00 fine for every employee not insured or if their current benefits do not meet the standards of the Act.
Rules and Regulations
Insurance companies will be prohibited from
denying coverage or setting rates based on health status, medical condition, claims experience, genetic
information, evidence of domestic violence, or other health-related factors.
Employers with more than 200 employees must automatically enroll new full-time employees in coverage. Any employer with more than 50 full-time employees that does not offer coverage and has at least one full-time employee receiving the premium assistance tax credit will make a payment of $750 per full-time employee
Mandatory creation of state-based American Health Benefit Exchanges and Small Business Health Options Program Exchanges, administered by a governmental agency or non-profit organization, through which individuals and small businesses with up to 100 employees can purchase qualified coverage. It also permits states to allow businesses with more than 100 employees to purchase coverage in the SHOP Exchange beginning in 2017. States may form regional Exchanges or allow more than one Exchange to operate in a state as long as each Exchange serves a distinct geographic area.
Businesses with 50 or more employees
Businesses with fewer than 50 employees are exempt from many of the regulations implied by the Affordable Care Act.
In fact, provisions in the Affordable Care Act allow those companies to buy into the State Health Care Exchange (SHOP). In this manner, these businesses can provide healthcare benefits to their employees at a much lower cost.
But before we answer this question we must ask ourselves:
Health Insurance Marketplace
As part of the Small Business Health Options Program Exchanges (SHOP) businesses (with less than 50 employees) will be able to buy cheap healthcare insurance for their workers. In 2017, this program will be expanded to businesses with less than 100 employees.
For those businesses that can't afford the healthcare insurance provided by SHOP, the federal government can issue tax credits to assist them with the cost of the coverage.
Paying the Penalty
Depending on the case, paying the fine of not providing healthcare coverage, could prove to be more cost effective plan than providing insurance to workers.
This is a legitimate method in which employers can avoid paying for healthcare coverage of their employees and avoid paying any penalties or fees to the federal government
It is predicted that the ACA will influence health insurers to raise their premiums in order to cover for their own costs for maintaining coverage. Although as mentioned before, the rate of increase is controlled by the federal government.
In the U.S., 96% of small businesses reported having employed less than 50 workers. Of the 4% that contain more than 50 employees, 90% report that they provide some form of health insurance coverage to their workers.
Florida is currently ranked number one in insurance fraud in the U.S. As a matter of fact, the city of Miami is ranked number one in both Medicare and Medicaid fraud. This causes a problem for many employers in the community who now have to spend more money on increasing insurance rates and premiums.
The cost of providing healthcare is a huge barrier for small businesses. Among small businesses that offer coverage, 40 percent spend more than 10 percent of their payroll on health care costs.