Why ACA Compliance Could Make or Break a Small Business

Posted July 22, 2014 by Layne Davlin
ACA Compliance 2014 Atlanta

What options do you have for ACA compliance?

The Affordable Care Act, also known as the ACA, has small and medium-sized business owners worried. Under the new law, companies with 50 or more full-time-eligible employees need to cough up adequate healthcare coverage or pay the price. Unfortunately, for certain businesses, the extra expense could put them under. Understand the ways in which the new laws affect you, and take the necessary steps you need to avoid financial failure.

How will this law increase your costs?

Companies spent an average of $10,522 per employee on healthcare in 2013. In order to provide adequate insurance to a team of 50, companies will be shelling out more than $526,000 on healthcare benefits alone. For companies without a stable profit margin, the cost of providing insurance plans can be overwhelming. Now, more than ever, businesses must ensure that they are incorporating these expenses into their business plans.

Some businesses offer high-quality care plans with high price tags knowing that many of their employees cannot afford to take advantage of them. Unfortunately, this method of cutting expenses cannot be used anymore. The ACA imposes a 40 percent tax per employee for every policy charging over acceptable limits. For businesses attempting to use this loophole, it can quickly make the savings more of a burden than a benefit.

On the flip-side, there are also employers who offer bottom-of-the-barrel plans for very little money. Despite the cost, they don’t offer adequate coverage and go totally ignored by many employees. The ACA closed this loophole as well, instigating a fine of $3,000 per employee to business owners who offer substandard options for healthcare coverage.

Finally, for those simply refusing to provide insurance plans, a $2,000 fine per employee will be handed down, though a pass is given on the first 30 people working in your company. A business with 50 workers then would still be fined $40,000 a year. In addition, this hurts their hiring prospects. Forgoing benefits puts the quality of your workforce – and therefore, your performance – at risk.

ACA Compliance Atlanta: Legal and Effective Ways to Save

Already, stories of businesses cutting hours or letting workers go to avoid going over the 50 person cap have begun to surface. Lawyers are circling these troubled waters, and signs point to a coming flood of ACA-related lawsuits. How can you evade big increases in healthcare expenses without losing your competitive edge?

Offering decent healthcare plans is your best option if you want to preserve your employer brand. To attract the best employees and maintain a good reputation, you must step up and provide adequate insurance plans. Employees who feel appreciated perform better on the job and are more likely to stick around through hard times; meaning, the costs of high turnover rates and unhappy workers will not have as big of an impact on your business.

Another legal and appropriate method of saving is hiring people through a Professional Employer Organization, or PEO. While you get the benefits of the employees’ hard work and training, the company leases you employees and is responsible for all benefits and payroll management. If you are nearing the 50 employee limit and cannot afford to provide insurance for them all, a PEO is one of your best options for covering your company’s needs without suffering financially.

Call 770-962-1700 to discuss your option for ACA compliance 2014.