Employers of all sizes need to understand the new requirements, laws, opportunities, and costs that come alone with the Affordable Care Act (aka health reform). Yet, the information on health reform is vast, complex, and not always accurate. With so much information and misinformation about health reform, along with the recent delays to the employer mandate and related regulations, many businesses find it hard to keep everything straight. But the worst thing a small business can do is nothing. Health reform impacts nearly every employer in the U.S. and the fines for lack of compliance can be costly.
We write a lot about what small businesses need to know about health reform, and their "must-do's" to stay in compliance with the new reforms. But what should small businesses not do?
Here are five simple health reform "don'ts" for small businesses.
1. Don’t do nothing
We already said this first "don't", but it's worth reiterating. All business regardless of size have an action to take. For instance, even if a small business does not offer health insurance, it still is required to notify all employees of the health insurance exchanges where they can purchase their own plans. Unsure what you're required to do? See this quick health reform compliance checklist.
2. Don’t think there's only one way to offer health insurance
If you're a small business (fewer than 50 employees), you're not subject to penalties in 2015 if you don't offer traditional health insurance, but that doesn't mean you don't want to offer health insurance. There are new options for small business health insurance -- including the SHOP marketplaces or a pure defined contribution health plan. Depending on eligibility, your small business may be eligible for the small business tax credit through the SHOP, or employees may be eligible for premium tax subsidies through the individual health insurance marketplace. Read more about defined contribution and health reform here.
3. Don’t try to re-organize the business to avoid the employer mandate
If your business is looking for creative ways to reorganize your employees or business to avoid the employer mandate, be cautious as they may not work. For example, if your small business is thinking about splitting the business into two, the ACA controlled group rules will likely still consider you one employer under the ACA because of overall business ownership. Likewise, if you're considering dropping employees' hours to reduce the number of full time employees, you still have to consider that the FTE count is based on full time employees plus full time equivalents.
4. Don’t think employees won't need help navigating health reform too
Employees, just like small business owners, are trying to wrap their heads around health reform and what it means for them personally. Regardless of what type of health benefits you offer (or don't offer), employee education about health reform will be beneficial. When employees understand health reform as a whole, and you've communicated your health benefits strategy within the context of health reform, employees will better understand the benefits offered to them, and/or their new options for coverage in 2014. Need a few tips on this? See: 5 Ways to Communicate Your Health Reform Strategy to Employees.
5. Don’t wait
Don’t wait until 2015. Most of the health reform's regulations have not been delayed. Once all elements of health reform become effective, employer penalties will be assessed and managed with a retroactive point of view, so you need to understand your business's requirements and take action now.
What are your small business health reform do's or don'ts? Leave a comment.