Health Care for Small Businesses: A Look at the Positives

Most owners of small businesses would like nothing better than to provide health care for all their employees. Health insurance greatly increases the quality of your workforce and allows for more competitive hiring. It also is proven to increases productivity and morale, not to mention elevating the status of your company on a whole. But in these hard times, many businesses find it nearly impossible to stretch the budget that far. With the passing of the Affordable Care Act, many are worried that they will have to cut jobs in order to stay under 50 employees – the number at which health care is going to become mandatory. But other small business owners are actually happy about the new laws and how the insurance business is changing. It’s important for both sides to look at the facts.

Some of the Changes Coming in 2014

• Small businesses will have increased negotiating power. With the creation of new Insurance Exchanges, small businesses won’t be overpowered by the greater clout of larger companies – they will be on the same footing as everyone else when it comes to finding competitive rates.
• If you have less than 25 full-time employees, you receive a tax credit of 50 percent. Currently, it’s at 35 percent, but it will increase in 2014 for at least two years. This provides the chance for many small businesses to offer health insurance for the first time.

Reasons This is Good News

• Productivity increases with preventive care. Employees take a lot of time off work for medical issues – not only their own, but those of their children and family members. When they have better access to see a doctor on a regular basis, they are more likely to take preventative measures.

Insurance companies could end up owing you. The law that says insurance companies must spend 80 cents per every dollar on actual medical care is already in effect – when they break it, they are legally obligated to refund companies the difference.

The idea that the Affordable Care Act requires small businesses to provide health insurance is a myth. The government typically defines a small business as one which has less than 50 full-time employees – and more than 95 percent of them fit this description. But if you choose to provide coverage, the financial perks could be a great incentive. The toughest decisions may be for those businesses in the middle – trying to make the transition from a small business to a larger enterprise, with upwards of 100 full-time employees. But in the future, health insurance for your workers may no longer be thought of as an optional extravagance, and instead as something that is built in to budgetary concerns. Instead of fighting it, companies might find it worth it to invest in the well-being of their work force. Not only is it a responsible choice to make, it’s also the smart choice when it comes to building the reputation and the longevity of your business – something that should be at the top of your priority list already.

– Steven Roberts writes for insurance blogs where you can learn more about Private Medical Insurance and small business health insurance.