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Sunday
May262013

Health Insurance Marketplaces Are Coming - Are You Ready?

What PEOs and Small Business Owners Should Know

With 2013 almost halfway over, our attention turns to 2014, when the Affordable Care and Patient Protection Act goes into effect. The individual mandate kicks in, requiring all Americans to purchase health insurance or face a fine. Employers with 50 employees or more will also face penalties of $2,000 per employee (the first 30 employees don’t count) for not providing a minimum level of health insurance coverage.

Small business owners, or employers with less than 50 full time employees (defined as 30 hours or more) are exempt from any penalties, fines or requirements to provide coverage to their employees. To the contrary, smaller businesses (defined as 25 employees or less) are rewarded for offering coverage to their workers. In 2014, companies can receive a credit of up to 50% of their premiums. The credits are calculated on a sliding scale which favors lower wage employers with 15 employees and less.


Most small business owners in America employ less than 50 full time employees. Those companies will not be subject to most of the provisions of the Affordable Care Act. This doesn’t necessarily relieve employers from any it’s responsibilities when it comes to guiding and assisting their workforce to comply with the individual mandate. Many lower wage employees will qualify for premium support in the form of credits that will offset their cost of coverage.

According to statistics compiled by the PEO Network, www.peonetwork.com, there are over 700 employee leasing, personnel management companies, and professional employer organizations operating throughout the United States. Approximately 90% - 95% of their client companies are firms with less than 50 full time employees. Many of their clients, small business owners, will be seeking the employee benefits and health insurance expertise these companies provide. PEOs are uniquely qualified to handle the additional compliance, reporting and analysis that business executives, HR professionals and tax professionals will require.

Health insurance marketplaces, formerly referred to as exchanges are being implemented in all 50 states. Some will be operated by the states individually, like California’s health insurance exchange called “Covered California” http://www.coveredca.com. Other states, like Florida, will introduce marketplaces which will be operated by the federal government, while other states will manage marketplaces as a joint partnership.

Are you ready?

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