The Affordable Care Act continues to change the way small business owner approach employee benefits, we can expect more of that in 2016. Since the ACA was passed, there have been countless pieces of legislation requiring small business owners to do much more to stay on top of ACA compliance. It also highlights the importance of having strong administrative support to assist with ACA compliance and what small businesses should expect to be prepared for another benefit year.
For the new year, more small business owners will have to offer coverage, while all small- and medium-sized businesses will see a large increase in the administrative work required to stay compliant. Health insurance costs will also be on the rise, all of which spells bad news for small business owners already struggling to navigate an ever-changing Obamacare. It is estimated that small business owners are spending $12,000 – $20,000 in administrative costs just to keep up with the huge burdens caused by the ACA, not to mention the aforementioned health plan rate increases.
More Small Businesses Have To Offer Coverage
One of the big changes for 2016 is more smaller companies will be required to to offer employees health care insurance under the employer mandate portion of Obamacare. For this year, businesses that have 50 to 99 full-time equivalent employees have to provide health insurance to at least 95 percent of their full-time employees and dependents up to age 26, or pay a fine. Previously, small businesses were excluded from the rule. This change hurts the businesses that were 50 to 99. More small businesses are going to have to offer the coverage. Businesses with more than 50 full-time employees will be hit with a fine of up to $2,000 per employee if they don’t offer coverage.
While many small businesses were aware the change was coming, those who weren’t planning for it are going to get hit with a lot of new compliance requirements. The Affordable Care Act is extremely difficult for companies to understand, so small business owners are worried about compliance.
Under the employer mandate for 2016, small business owners have to offer health insurance for employees considered full time, but what constitutes full time can be confusing to business owners. That’s because in order to be considered full time, the worker has to average at least 30 hours a week in a month or work 130 hours in one calendar month. Business owners have to calculate hours just to figure out if the company has to offer insurance. And that doesn’t even touch upon all the documentation and notifications required to stay compliant with the Affordable Care Act. Some of the regulations include required reporting about the health insurance marketplace to employees, a 90-day maximum waiting period to offer new employees health insurance and providing employees with a “Summary of Benefits and Coverage” form. Not to mention reporting back to the government on health coverage of employees.
Increase in Audits Due to Compliance Requirements
Staying compliant in terms of informing and reporting about health care coverage isn’t only going to be a headache. Do it wrong, and the business could face a time-consuming and costly audit. Department of Labor audits are expected to continue to rise again in 2016. Unlike large companies, small businesses don’t have a company attorney making sure everything is done right or a human resources department staying on top of all the paperwork. We realize small businesses are struggling with the health care law, and we offer full administrative support to our members to help alleviate the burdens placed on them by the ACA.
Beware of Fewer Choices and Higher Premiums
In addition to increased complexity because more small businesses will have to offer health insurance, business owners should expect to see a rise in premiums this year. Most small businesses report increases in premiums, and are looking for more ways to control costs. For example, if employers are looking to maintain rich benefit offerings while also controlling costs for themselves and their employees, voluntary benefits could be a great solution.
We understand that this time period is a very uncertain one for businesses of all sizes. We also know that while you’re running your business you don’t have time or adequate resources to address the endless legislation and regulations affecting your business. Joining NARFA empowers you with best in class administrative services to help you stay compliant and ahead of the curve when it comes to your employee benefits and much more.
We offer programs designed for the automotive, roads, fuel, and related industries built by advocates in your industry. Learn more on the NARFA website and contact us today to find out how to experience our power in numbers serving hundreds of businesses since 1929!