The Affordable Care Act includes changes to the insurance market

The Affordable Care Act includes changes to the insurance market plans that small businesses must comply with. Small businesses are considered to have less than 500 employees and small business are known to employee over half the workforce and are a main contributor in job creation. “While 96% of employers won’t pay additional taxes, there is an increase to the current Medicare part A tax, paid by 3% of businesses and employees making over $200,000. There is also a requirement for employers with the equivalent of over 50 full-time equivalent employees to purchase health insurance for their workers or pay a penalty by 2015 / 2016. The Affordable Care Act offers incentives, such as tax breaks and tax credits via the SHOP Exchange, to small businesses with the equivalent of less than 25 full-time workers to help them provide health benefits to employees. 90% of US firms have less than 20 full-time employees.” (ObamaCare) In this case, all health insurance plans are expected to, starting from 2014, guarantee not only the availability but also the renewal of the insurance cover regardless of health status. Young adults in this case may remain on their parents plan until they are 26 years old. The second regulation is about costs. The premium rating, whose basis is the health status, will as from 2014, be prohibited for new plans. Premiums allowed for new plans will only be different in relation to geographic location, policy type (family or individual), tobacco use and age.  Up to a thirty percent discount may be offered by the health plans as a way of rewarding those who take part in wellness programs. The third regulation that businesses have to comply with concerns the coverage.  The other regulation concerns the value. In this case, all plans will be expected to report the percentage of their income or proceeds from premiums that are used on quality improvement and medical care. In case this amount, also called Medical Loss Ratio is less than eighty percent, individuals enrolled in the plan as well as small businesses in the plan will get a rebate (Jones, 2013).

The unintended behavior that can be expected from the businesses is that they will intentionally ignore providing affordable coverage. Small businesses feel they have too many things to pay that prevent them from being profitable. The Healthcare Act is just another insurance that is required like workers compensation that will prevent them from being profitable.  Businesses with at least fifty employees will be expected to offer affordable coverage. However, many of these businesses will fail to do so. If they fail, then there are alternate regulations that can be enforced to address this. Those businesses that fail to provide the affordable coverage will be required to pay a penalty. Businesses having 49 employees or fewer will be exempted from paying these penalties. For the businesses having 50 or more employees, working for an average of 30 or more hours each week, will be fined $2000 for each employee if they fail to offer affordable coverage. Therefore, to avoid these penalties, businesses have to provide insurance covering at least sixty percent of the actuarial value of the benefit cost. The primary objective of the Act is that health coverage has to be affordable to workers. This means that the premium of the individual employees should not go beyond 9.5% of the employee’s household income. If the insurance coverage offered does not meet its affordability standards, workers may get tax credits to buy insurance on their own (Boykin, Schoenhofer & Valentine, 2014).

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