Under the Affordable Care Act, employers with fewer than 50 employees are not required to offer health insurance to their full-time employees. But small businesses still face challenges as a result of the employer mandate, reports the Wall Street Journal.
Because ACA guidelines state that employers must have at least two full-time employees in order to be eligible for group plans, many small business owners were kicked off their small-business plans earlier this year and must now find individual coverage or face a penalty.
But as many small-business owners turn to the individual market, the benefits do not compare to those offered in group plans, notes the WSJ. While some are finding affordable plans on the individual market, a small portion of those kicked out of group plans due to the healthcare reform law may experience pricier premiums.
This so-called employer mandate has been in the spotlight since last summer--the White House postponed to 2015 the mandate that requires employers to provide coverage to their workers. And back in February, the mandate received another delay from the Obama administration, who pushed back the mandate until 2016.
The ACA employer mandate provision is not only complicated, it's increasingly unpopular. Small-business owners whose plans are now defined as "small group" must adhere to the requirement that bans charging higher premiums to riskier members. As a result, this will boost the cost of the rest of the employees' premiums per month.
To avoid the employer mandate, some small-business owners are looking into giving their employees extra money each month to subsidize the cost of their own health plans on the individual market--but this move and may come with hidden payroll taxes and income taxes.
"It sounds great--give your employees money to take care of themselves--but it's not really so easy," James Schutzer, president of the New York State Association of Health Underwriters, told the WSJ.
- here's the WSJ article