Just when it seemed that the final stages of the Affordable Care Act (ACA) were on the horizon, pressure from the business community has persuaded the Obama administration to delay the employer’s mandate element of the legislation for a full year. Under the terms of the mandate, employers with 50 full-time workers or more were due to be fined at least $2,000 per uninsured employee from January 2014. However, this latest delay is causing a level of confusion among the business community. So, what will the delay really mean to the average medium-sized business?
Planning for the Employer’s Mandate is Still Essential
Those businesses operating with a workforce on or around the mandate’s fifty-employee threshold can, if they wish, employ strategies to avoid being eligible for the employer’s mandate element of the ACA. Such strategies can include converting full-time workers into part-time workers, freezing recruitment, merging job portfolios to reduce the minimum number of staff required and forcing through redundancies.
It is important to remember, however, that the announced delay is just that. The employer’s mandate will come into force from January 2015. And while businesses have a little breathing space to prepare for it, it is still coming. Dealing with uncertainty in business can be difficult, so businesses are being advised to plan for 2015 by planning budgets and recruitment initiatives in advance.
How Businesses Can Take Advantage of the Delay
Uncertainty is rarely good for business, but the delay in the employer’s mandate element of the so-called Obama Care Act could be used to a business’ short-term advantage. Recent surveys by the Wall Street Journal and Vistage International suggest that many small business owners are ill-prepared for the upcoming changes, so it will give them the opportunity to study the legislation in more detail.
A company such as a firm of lawyers or a tech business will generally have a relatively young workforce, and that means their health insurance costs will currently be relatively low. It is being argued that these firms will be hit hardest by the employer’s mandate, as their employees are less likely to require medical care than those in other sectors such as manufacturing, manual labor and the catering industry. It is therefore those firms with a relatively healthy workforce and low health insurance costs that should prepare for the steepest rises in costs. Firms with already high health insurance costs may actually find that those costs decrease as a result of the ACA.
For companies that were ready for the 2014 deadline, they may now find that they have some extra cash for investment. Those companies could also use that unexpected cash to offset rising insurance costs that many employees are facing. Employees who end up with no insurance or who have to use Affordable Care Exchanges to buy health insurance may see a sudden rise in their insurance costs due to penalties from the federal government. The money saved by firms because of the delay could be directed towards their employees - raising morale and motivation levels in the process.
Above all, what the business community seems to be crying out for is some clarity. The revised deadline of January 2015 seems a long way off at the moment, and a myriad of problems could further delay the employer’s mandate in the meantime.
If you have any concerns about Colorado group health insurance and the latest Obama Care delay and what it means for your business and its employees, call us today at 888-279-9701. One of our specialists will be happy to discuss your specific circumstances and insurance requirements.