By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Small Businesses and the Affordable Care Act: What do They Need to Know?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Small Businesses and the Affordable Care Act: What do They Need to Know?
BusinessPolicy & Law

Small Businesses and the Affordable Care Act: What do They Need to Know?

DavidEWilliams
DavidEWilliams
Share
5 Min Read
SHARE

Small business is an essential part of the American economy and a key focus of the Patient Protection and Affordable Care Act (PPACA). Only 57 percent of companies with under 50 workers provide health insurance, compared to 92 percent in the 51-100 range and 97 percent with more than 100 employees. Despite what you may have heard, PPACA (aka ObamaCare) is not a radical government takeover of the health care system. Instead, it seeks to preserve and extend the employer-sponsored health insurance model and extend it further into the smaller employer realm.

Small business is an essential part of the American economy and a key focus of the Patient Protection and Affordable Care Act (PPACA). Only 57 percent of companies with under 50 workers provide health insurance, compared to 92 percent in the 51-100 range and 97 percent with more than 100 employees. Despite what you may have heard, PPACA (aka ObamaCare) is not a radical government takeover of the health care system. Instead, it seeks to preserve and extend the employer-sponsored health insurance model and extend it further into the smaller employer realm.

PPACA was crafted to encourage smaller companies to provide insurance for employees by regulating the insurance market, establishing health insurance exchanges, providing tax credits for the smallest employers, providing grants for wellness programs and imposing penalties on some who don’t comply. We’ll see where all this leads as the Supreme Court considers PPACA’s constitutionality and Democrats and Republicans contest the 2012 elections, but small businesses would be wise to start planning for the full implementation of PPACA, which is less than two years away.

Kaiser Family Foundation has a good fact sheet on the topic. Key takeaways are:

More Read

End of Life Care: The Feeding Tube Frenzy
Choosing the Right mHealth Tools for the Job
Socialcam: Mobile Video Sharing Made Easy
Disruptions on the Yellow Brick Road
4 Things That Could Happen in Health Reform
  • PPACA allows businesses to “grandfather” health plans in place as of March 2010. That was to address concerns that people would have to give up health plans they’re happy with now. Companies may wish to use grandfathered plans because such plans are subject to fewer requirements than the “Essential Health Benefits” that will be specified under PPACA. Most small businesses have at least one grandfathered plan. Theoretically these plans could be cheaper, but in practice I expect that most such plans will be abandoned over the next five years as market conditions change
  • Health plans will have to guarantee that coverage is available and can be renewed. They’ll also have to offer coverage to dependents up to the age of 26. Importantly, plans won’t be able to base premiums on health status of a company’s employees. Instead they can rely only on age, smoking status, individual/family and location. They can provide substantial discounts for those engaged in wellness programs
  • Essential Health Benefits (referred to above) will be decided on a state level, with federal input
  • Health plans will be subject to minimum medical loss ratio (MLR) rules and will have to rebate overcharges if medical and quality improvement spending fails to reach 80 percent of premiums
  • Plans will be assigned simplified ratings (bronze, silver, gold, platinum) to reflect their level of coverage relative to expected total costs
  • Small businesses will be able to participate in state run or federally run health insurance exchanges
  • There will be penalties for businesses with more than 51 employees if they don’t provide affordable coverage. Note that businesses with fewer than 50 employees are exempt from the penalties
  • Substantial tax credits will  be available to low-wage businesses with fewer than 25 employees
  • Businesses with fewer than 100 employees will be eligible for grants to launch wellness programs if they did not already have them in place

In short, PPACA has a lot of implications for small and mid-sized businesses. But employers with fewer than 50 workers won’t actually be compelled to do much. Their employees are likely to obtain insurance coverage through the individual market and Medicaid. In contrast, under state health reform in Massachusetts the mandate kicks in when employers have 10 employees, which is a big difference.


TAGGED:PPACAsmall business
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

dental care
Importance of Good Dental Care for Health and Confidence
Dental health Specialties
October 2, 2025
AI in Healthcare
AI in Healthcare: Technology is Transforming the Global Landscape
Global Healthcare Policy & Law Technology
October 1, 2025
Choosing the Right Swimwear for Health and Safety
News
September 30, 2025
sports concussions
Concussion In Sports: How Common They Are And What You Need To Know
Infographics
September 28, 2025

You Might also Like

health benefits on Marijuana
NewsPolicy & Law

California Advocates Cite Health Benefits of Cannabis Legalization

June 16, 2017

Are Healthcare Consumers at the Forefront of Digital Health?

March 26, 2014

Medication Shortages Another Area of Concern for Hospitals

May 31, 2011
warning signs of addiction
AddictionHealth careWellness

Health Problems That Say You Have an Addiction Problem

May 7, 2021
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?