There are several pros and cons on Obamacare. How you are impacted by these pros and cons depends who you are, and how you purchase health insurance. This section covers the common pros and cons of Obamacare for individuals, families, and small business.
As an individual, the Affordable Care Act has the following pros and cons.
Obamacare Pros for You and Your Family
Individual health insurance is guaranteed-issue (you cannot be denied or charged more because of pre-existing conditions).
Individual health insurance is made more affordable with premium tax credits (you are eligible if your family of four made less than $95,400 in 2014).
Individual health insurance is now required to cover Essential Health Benefits, a core package of healthcare services.
Medicaid eligibility has expanded in many states.
Health insurance is becoming more transparent.
If you don’t have coverage, and don’t qualify for an exemption, you will pay a tax penalty - known as the Individual Mandate.
You can now only sign up for individual health insurance during specific enrollment periods.
As a small business, the Affordable Care Act has the following pros and cons.
Obamacare Pros for Small Businesses
Your Small Business Does Not Have to Offer Health Insurance. If you are an employer with fewer than 50 FTE’s, there is no requirement for you to offer health insurance - the Employer Mandate does not apply to you. This is a big pro for small businesses who often find that alternatives to group health insurance - such as individual health insurance reimbursement - are the best health benefits solutions.
Individual Health Insurance Got a Big Make-Over. Individual health insurance is now better, and more affordable than traditional group health insurance. As such, small businesses are transitioning employees to individual health insurance and contributing to their premium expenses instead of offering group health insurance.
Small Businesses Can Reimburse Employees for Individual Health Insurance. As mentioned above, small businesses can reimburse employees for individual health insurance. This allows the business to contribute to employees’ healthcare, similar to how your business would contribute to a group health insurance plan. This type of reimbursement arrangement does not satisfy the Employer mandate, but remember - the employer mandate does not apply to small businesses.
The Affordable Care Act is Contributing to Higher Group Health Insurance Costs. As if group health insurance wasn’t expensive enough already, new Obamacare taxes and fees are increasing the cost of small group health insurance plans.
The SHOP Marketplace Isn’t Working for Small Businesses. Although the small business SHOP Marketplace seemed attractive on the surface, it is still a group health insurance plan and it doesn't address the core problems small businesses face with group health insurance including cost, participation requirements, and instability. Additionally, as the SHOP Marketplace has rolled out, there have been multiple implementation delays, technical glitches, and inflexible rules. As such, most small businesses are skipping over the SHOP.
There are New Compliance & Reporting Requirements to Manage. If you offer any kind health benefits (group health insurance or individual health insurance reimbursement), there are new compliance and reporting requirements to comply with. Sure, these new rules have a purpose, but for a small business it means more time each year to ensure compliance.