There was some considerable speculation about the ways in which the implementation of the Affordable Care Act’s coverage mandate would affect small business owners’ ability to keep their companies afloat as they had to bring on more health insurance costs. Now, it seems that most entrepreneurs will likely keep offering their employees coverage despite the higher price tag they might face.
One of the primary reasons it seems that most small businesses in particular will not discontinue the offering of health insurance to their workers is that there is a fear among owners that not doing so will lead to their inability to attract top candidates for job openings, according to a report from the University of Michigan research associate professor Helen Levy, with the school’s Institute for Social Research at the Ford School of Public Policy and School of Public Health. It’s further believed that the new health insurance exchanges could additionally level the playing field for small businesses because of the additional access consumers will have to affordable coverage in general.
“That’s going to be less of an issue now that workers will have the option of getting coverage from someone other than an employer,” Levy said. “And we expect that to improve the quality of the worker job matches that are seen in the labor market, and that is good for everyone. … Now we may see less coverage from employers for part-time workers, and they will be going to the exchanges. But in many cases, that is going to be a better deal for them because they can get access to a tax credit in the exchange that they wouldn’t have been able to access if they continued to have employer-sponsored coverage.”
The exchanges won’t be fully implemented until 2018, at which point it’s believed some 20 million Americans will be buying their coverage through these marketplaces and simultaneously receiving tax credits to help them pay for it, the report said. These will total about $92 billion five years from now, meaning the average tax credit will be about $4,600 per recipient.
Entrepreneurs still concerned about the higher cost, though, might want to consider how they are currently paying for their various small business insurance plans. Reducing costs for liability insurance or worker’s compensation insurance, for instance, might help to make other financial decisions a little easier to make going forward.
