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ACA Reprieve Provides Breathing Room For Employers

Fight or flight is that basic human instinct that causes us to face our fears or turn tail and run.

Since Obamacare was enacted in 2010, many employers have chosen to run from, or at least ignore, the pending changes promised under the Patient Protection and Affordable Care Act. If you’re among them, you can choose to ignore health care reforms a little longer thanks to a one-year reprieve the White House announced on July 2. However, sooner rather than later, you’re going to have to muster the courage to face your fears and tackle this looming issue.
Here are a few key considerations:

In or Out — If your company has 50 or more full-time-equivalent employees, under the PPACA you will be required to provide health insurance for employees starting in 2015 or face penalties. However, for businesses with fewer than 50 full-time-equivalent employees, doing nothing is a legitimate option. Small employers are not obligated to provide health insurance coverage under PPACA, so small-business owners can opt out.

Public or Private — If you are going to offer a company plan, will you acquire it through a public or private insurance exchange, or marketplace?

Marketplaces offer a selection of standardized, government-regulated health care plans. Every state marketplace offers somewhat different plan options, but generally speaking, if your company falls into the category of a small business by your state’s standard, you may be able to find an affordable health insurance plan through your state’s public exchange. Some smaller employers that purchase insurance through a public exchange may be eligible for tax credits.
Private exchanges, managed by companies such as New York-based Towers Watson and Mercer, and Mountain View, Calif.-based eHealthinsurance, also offer small-business health plans, but using a private exchange may make your company ineligible for tax credits.
To help you decide, access one of the many online tools to compare the estimated cost of various plan options.

Weigh the Options — Despite their ability to opt out, some small-business owners still want to offer their employees a health insurance plan as a magnanimous gesture or to compete with other employers, but they shouldn’t jump too quickly. It’s wise to consider the various options your workforce may already have for quality coverage — many employees could be covered under a spouse’s plan.

In other cases, it may be more economical for employees to buy their own individual plans directly through the state exchange rather than participate in a company plan. In fact, depending on their income, some may qualify for premium subsidies from the government when they purchase individual coverage through an exchange.

Consider part-timers — If you are determined to dodge the high cost of health care, consider whether your company could shift a portion of its workforce to part-time status without sacrificing productivity or profits. Because employers are not required to provide insurance coverage for part-time workers, many are moving to a heavily part-time workforce. The law defines part-timers as employees who work, on average, less than 30 hours per week, however, the sum of hours worked by part-timers counts toward your company’s number of full-time-equivalent workers.

Communicate — Even if opting out is an option for you, as a business owner you can still assist your employees as they maneuver through this complicated process. Educate yourself so that you can clearly communicate to employees what will and will not be different under Obamacare. Share materials and resources to help them sort through the multitude of coverage options and make informed decisions.

Some revisions to PPACA are still likely, but it is coming. Depending on your company’s demographics, it may be entirely inconsequential, but if PPACA will have an impact on your business, there’s no need to fight it. Map out a plan of attack and face it head on.

JOHN ALLEN is president and COO of Houston-based G&A Partners,

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