The Health Care Law’s Effect On Small Business

“Beginning on Jan. 1, 2014, all U.S. citizens and legal residents will have to obtain coverage if they do not have coverage provided by their employer.” (sfgate.com 2010)  That is what this law does, it makes sure that everyone is covered by insurance.  And it helps people get insurance.  It gives incentives to small businesses to cover their employees, and the smaller you are and the smaller your pay scale, the more incentives it gives.  As your business grows bigger, providing insurance becomes “mandatory” or your company will pay a penalty for not providing insurance.  The penalty is not huge and will likely result in companies paying the penalty rather than providing insurance.

The health care law makes denying coverage based on preexisting conditions illegal, and rate adjustments are only allowed based on age, geographic location, and tobacco use.  Lifetime maximums are also history and children will be allowed coverage up to age 26 under a parent’s family policy.  These changes may make insurance policies more expensive but will allow coverage to more people, ultimately helping to bring down medical costs.  So the long-term effect of this law on policy costs is really unknown.

As any law tends to be, the details are mind boggling.  What concerns me is not the actual effect on small business but the new rules and complexity that may be overwhelming to a small business owner.  Hopefully there will be help from the SBA to understand the new law and how it affects us individually.

Please review the following resources for more information:

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