Expert Warns of ACA “Double Whammy” for Small Business

Daniel Hood of Accounting Today reports on an expert warning small businesses that changes to the Affordable Care Act for 2016 could force companies with 50-100 employees to pay substantially more for health care.

According to Mark Dietrick, CPA, ABV, author of The Financial Professionals Guide to Healthcare Reform and past chair of the American Institute of CPAs’ National Healthcare Industry Conference Committee, small businesses in that range are not considered part of the “Small Market Group.”  But by 2016, Dietrich says, the employer mandate will kick in for companies with between 50-100 employees, and they will be moved into the “Small Group Market” for insurance coverage.  That could mean substantial increases to health insurance premiums.

“The reason they’re forcing these people into the Small Group Market is to expand the actuarial base and to absorb some of the expected losses,” he said. At the same time, Small Group premiums are likely to rise even more, he said, because of the benefit requirements in the ACA, which limit deductibles and don’t allow insurers to turn down those with pre-existing conditions.

Worse yet, he warned, states may eventually merge the Small Group Market with the markets for individuals. “If states don’t get the enrollment of young people that they expect [to make state insurance exchanges viable], then the likelihood of states combining the Small Group and individual markets will go up.”

Dietrich noted that since these rules don’t apply to companies that are self-insured, this may be the time for companies to investigate the new products that are emerging to make self-insurance possible for these small businesses.

Source:  Accounting Today at http://www.accountingtoday.com/news/look-out-for-the-acas-double-whammy-69306-1.html