In 2014 small business owners in California have to implement the Affordable Care Act (ACA) as part of the health care reform. ACA requires business with 50 or more full-time workers to provide a minimum level of affordable health care coverage or pay a penalty, which starts at $ 2000 for each full-time employee after the first 30 employees. If a company offers health insurance, but the coverage is unaffordable, the company will be required to pay a penalty of $ 3000 for every employee who receives a federal subsidy to purchase health coverage on the state exchange.
Accordingly to the newest quarterly survey conducted by Harris Interactive on behalf of the Chamber of Commerce found that:
- 77% of respondents said the ACA would increase their costs to provide employee coverage;
- 71% said they would face a more difficult time with hiring employees because of the ACA; and
- About one-third said they plan to cut back their workers’ hours as a way to reduce the number of full-time employees on the staff (“On The Money,” The Hill, 4/4).
In addition, 27% of respondents said they plan to stop offering health benefits to employees (“Inside Politics,” Washington Times, 4/4).
Los Angeles relies heavily on the service industry, such as car washes and restaurants, who currently offer only rarely health insurance for their employees. Many of these companies will have to provide health insurance next year, and as a consequence consumer prices will rise, as the business will have to cover their additional expenses.
The healthcare reform has many good aspects, but to make small business responsible for providing health coverage, might actual slow down our economy.
Confused what the ACA might do to your small business, contact us at Solid Health Insurance Services we will help you to find affordable health insurance for your small business in Los Angeles.