There is a lot of uncertainty about how the healthcare reforms will affect business owners as the changes begin to roll out, especially in terms of cost. Now required to provide health insurance for all employees, business owners are debating forgoing the health insurance and paying the fee.
Under the Affordable Care Act, employers with 50 or more full-time workers will be required to provide coverage for employees who work an average of 30 or more hours a week in a given month. If they don’t comply, business owners will pay a $2,000 dollar penalty for every full-time worker over a 30-employee threshold.
The requirement has many business owners, especially those in the retail and hospitality sector, which employ large numbers of full-time workers but typically don’t provide health insurance, worried they will be unable to keep up with healthcare costs. As an alternative, some business owners are considering forgoing their coverage entirely and opt to pay the penalty instead, according to the Wall Street Journal.
However those numbers remain small. One study of 400 employers with 50 or more workers found 71% planned to continue offering health insurance while only 3% said they planned to pay the penalty. In addition, there is a drawback to the pay-the-penalty strategy. Health insurance is deductible as a business expense, but penalties aren’t.
Businesses are in a difficult transition, and there are many unknown factors and effects that will emerge and the new healthcare reforms roll out. Employers are looking for health insurance alternatives to help with skyrocketing medical costs and regulatory changes that can impact their expenditures.
Sinclair Risk & Financial Management works with companies of all sizes to design and implement Group Medical options that rethink the traditional way of offering benefits and meet the financial needs of employers while also addressing the choices and flexibility employees want. Contact us today for more information about our Wallingford and New Haven County Group benefits programs. (877) 602-2305