Small Business Gets Creative in Response to Obamacare


The closer Obamacare gets to full implementation, businesses get more creative in finding ways to wriggle out of it.

Affordable Care Act Obamacare

The Affordable Care Act, otherwise known as Obamacare, has many businesses scrambling to find ways to free themselves from the new regulations.

As reported in an article by Sally Pipes for Forbes.comU.S. Companies Engage In Financial Jiu-Jitsu To Get Around Obamacare—companies are “wasting no time finding ways to free themselves from the law’s strictures.”

Cutting hours, moving people to part-time and hiring contract workers are some ways companies are skirting the mandate. The new law, which goes into full force on Jan 1, 2014, requires that businesses with more than 50 employees offer health insurance to employees that work over 30 hours a week or face fines.

One new way for small- and medium-sized businesses to avoid some of the regulations in the ACA is by “self-insuring.”  Companies pay for healthcare that workers use directly, and they accept any risk for employee health costs.

Human Resources: Free live ovation demoNext, they purchase an insurance policy called “stop loss,” which goes into effect when medical expenses reach a certain amount. This allows companies to save money, by dropping out of the exchanges the ACA set up exclusively for them.

Yes, these companies will save money, but the unintended consequence could be that the exchange, with limited participation, will “fall apart” before they even have a chance to take hold.

Problems in implementation will also hamstring the rollout, as well as competition.

Pipes writes:

Meanwhile, the inauguration of the much-ballyhooed “Small-Business Health Options Program — SHOP, for short — has been delayed by the federal Department of Health and Human Services because of “operational challenges.” These exchanges were supposed to give employees at small businesses lots of government-approved choices of insurance coverage. Instead, they’ll have just one choice in 2014. The full array of insurance options will not be available until 2015.

So much for competition.

The biggest fear is that premiums will skyrocket. Several experts believe small-business healthcare insurance premiums will rise at least 30 percent. If that does happen, small business will continue to think of creative ways to wriggle out of Obamacare.

You can see Pipes’ entire article at Forbes.com.

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