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| By stockimages, published on 26 October 2012 Stock Photo - image ID: 100108542 |
The two biggest concerns with the law are the cost of subsides the federal government is providing to indivduals earning under 400% of the Federal Poverty Level and the cost of insurance for those earning over 400% of the federal poverty level. This amounts to $45,000 for a single person household and $95,000 for a four person house hold. So if you make more than that....LISTEN UP.
NOW is the time to prepare. This is pretty simple really. Some insurance companies are dealing with the Affordable Care Act (ACA) in hugely different ways for the first year. There two very large insurance companies that will keep your policy the same from now until the end of 2014. This means your policy will not change, and therefore the pricing will not be affected, by the ACA. What a HUGE deal! Everyone should 100% for sure try to take advantage of this by reviewing your policy with a broker to find out the real deal. Talking directly with a captured agent will only get you the "Party Line" for his/her insurance employer. Talking to a broker will give you a broader view of the marketplace because they know the plans for various companies and will have a much better chance of putting you in a good position for the entire year of 2014.
The smart option for Small Businesses with anywhere from 1 employee up to 49 Full Time Employees (FTE) or FTE equivalents is to move into and Health Reimbursement Arrangement (HRA). Remember that these business owners are not legally obligated to provide insurance to employees. However, health benefits are an effective recruiting and retention tool, so an employer that does provide benefits has advantages for employees. In the past, a small group plan would guarantee acceptance for everyone. In the new world of health insurance, small group plans are not necessary and will be cumbersome and expensive.
Drop your group plan, it is a Dinosaur. Implement an HRA that allows your employees to use benefits to purchase health insurance on the public or private marketplace. The HRA allows employers provide a specific benefits to each employer to buy health insurance and pay for health related items. The dollar amount of the benefit amount is decided by the business owner and can be fixed. Which means it will not be subject to changes in the premiums for health insurance. The money paid into the HRA by the employer has 0% taxes paid on it and the employer spends it tax free as well. The program is administered on-line and takes away the need for a large Human Relations involvement in health benefits. Which is cost saving potential for businesses.
I am a Broker, so I can help get you a free pass on the first year of health care reform. My hope is that during the first year of the law, our esteemed representatives figure out a way to reduce the high cost of insurance required through the ACA. Then by 2015, you can turn in your free pass for some reasonably priced insurance. That is a plan that kicks the can down the road...but is still the best option for many.
And by the way, there are many simple ways to make the cost of this law lower, we just need some reasonable revisions in the insurance requirements. So if the Federal Government would like some advice on how to do that...they should also talk to a broker!!
More to come on this world of change. To review previous posts scroll through my past lessons below.
Lesson #1 - Introduction
Lesson #2 - Basic Reason for creating the Patient Protection and Affordable Care Act
Lesson #3 - Public exchanges for Purchasing Insurance
Lesson #4 - Essential Health Benefits that will be added to all Health Insurance policies in 2014
Lesson #5 - Tax Credits to Help Pay for Health Insurance
Lesson #6 - Enforcement and Penalties in the Affordable Care Act
Lesson #7 - Preparing for the Affordable Care Act
Lesson #8 - Options for Small Businesses
Lesson # 9 - Will my Insurance Premiums change in 2014?
Lesson #10 - What Will Happen to Small Groups in 2014?
Lesson # 11 - Why Should I Buy Insurance Before the Deadline?
Lesson #12 - What does the Delay in the Employer Mandate Really Mean?
Lesson #13 - Can I keep my Current Health Insurance Plan?
Lesson # 14 - Who is Providing Insurance During Open Enrollment?
Lesson #15 - Out of Pocket Spending Limits - Law Change
Lesson 16 - SHOP - Marketplaces for Small Businesses
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