If you are a small business owner, you may not believe that the Affordable Care Act (ACA), affectionately known as ObamaCare, effects small businesses. Your belief would be Health Care Reformshutterstock_144091570incorrect. Effective January 1, 2015, ObamaCare places penalties on companies with 50 or more employees that fail to provide insurance to their employees. Notwithstanding that criteria, the impact of ObamaCare will also be felt on small business for the following reasons:

  1. Small business owners will no longer be able to determine who qualifies for health insurance coverage. Commencing 2014, any employee who works 30 hours per week on average must be offered the same health insurance coverage as a full-time employee. The impact of this ObamaCare provision is already being felt. Employers are reducing hours to below 30 hours per week on average, so that the health insurance coverage requirement will not be imposed.
  2. The new health insurance rules do not necessarily take effect in 2014.  Small business health insurance plans generally must cap deductibles at no more than $2,000.00 for individuals and $4,000.00 for families and must include essential health benefits, such as maternity, mental health and pediatric services.  However, these provisions don’t apply to the small business health insurance plan until it reaches its first health insurance renewal date in 2014.
  3. Rates are expected to escalate.  Rates are projected to increase by 30% or more and will likely be passed along to employees in the form of higher premiums.

Your best bet as a small business owner is to contact your business attorney or insurance provider or tax advisor or contact the Health Insurance Marketplace for Small Employers to determine whether your business qualifies for any tax credits.