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?

Health Care Reform - The New Reality for PEOs

The End of Denial for Employee Leasing and PEO Companies?

NAPEO, The National Association for Professional Employer Organizations has published on their website napeo.org an announcement entitled;

PROFESSIONAL EMPLOYER ORGANIZATIONS CONGRATULATE PRESIDENT OBAMA ON REELECTION, LOOK FORWARD TO WORKING WITH ADMINISTRATION ON HEALTHCARE.

I had to clean my glasses. This is an industry where many of it’s owners and executives, (over 98% of all employee leasing companies and PEOs are privately held) have fought health care reform every step of the way. Large contributions were made to The National Federation of Independent Business, The Chamber of Commerce, (click on this link to see the NFIB position) and a host of Republican PACs and lobbyists. We reported on their attitudes and views about Health Care Reform and the PPACA in our earlier blog post Want to Repeal Health Insurance Reform, Not Likely!!!.

NAPEO President and CEO Pat Cleary is quoted as saying “PEOs are already the go-to source for small businesses looking for help in preparing for and complying with the healthcare benefits changes brought on by reform, so we feel we have an important role to play as the implementation of the ACA proceeds” and offered its industry’s expertise as the Obama administration moves forward with implement the Patient Protection and Affordable Care Act (ACA).

Only time will tell if NAPEO, and the industry as a whole embraces Health Care Reform or not. My opinion is that the PPACA is one more reason small business owners should consider the services of proactive, qualified and responsible employee leasing companies and professional employer organizations.