Healthcare Changes for Small Businesses in 2016

By David Chase, Vice President of National Outreach for Small Business Majority

It’s been nearly six years since the passage of the Affordable Care Act (ACA), but some provisions of the healthcare law are still being implemented. As 2016 gets underway, it’s important for small employers to know about some new changes taking place that can help improve healthcare options for small businesses. By learning about the law, small business owners can empower themselves to make the best decision regarding health coverage for themselves and their employees. Below are some key facets of the law to help small business owners fully understand their options.

Employee Choice

One of the biggest changes for 2016 is that employee choice is now available in every state, which means small business workers can choose from a number of plans from different insurance carriers. This allows employees to choose which carrier they’d prefer to use, instead of the business owner choosing for them. We know from our polling that small business owners like this option. Our scientific polling found two-thirds of small employers believe allowing employees to choose among multiple carriers is an important element of the healthcare marketplaces. And for small businesses, this component is fundamental in distinguishing the new insurance marketplaces from the outside health insurance market.

Small Group Expansion

Depending on your state, you may also see a change in the types of businesses that qualify as “small” businesses. Until recently, the definition of small businesses only included employers with fewer than 50 full-time employees. Now, some states have chosen to expand the small group market to include businesses with up to 100 employees. If you run a business with 50–100 full-time or full-time equivalent employees and your state chooses to expand the small group market, you’ll likely have to choose a new plan that complies with requirements for small business insurance. You’ll also be able to participate in SHOP for the first time, which will open up new coverage options and is open year-round.

Business owners entering the small group market may find they can get a better deal on health insurance through SHOP. For small businesses that buy a plan that’s compliant with the healthcare law, they will no longer be charged more for female workers or for employees who have pre-existing conditions. What’s more, there are new limits in place as to how much more employers can be charged for their older workers. Small businesses could save money by buying a compliant plan through the new health insurance marketplaces, or buy a healthcare plan with better coverage for about the same cost as their current plan. When considering health plans, employers should check out these options before deciding on a plan for the year.

Requirements and Deadlines

It’s important for businesses to know whether they are required to offer health insurance. As of January 1, companies with more than 50 employees are required to offer health insurance to employees; previously, only companies with 100 or more employees were required to offer coverage. It’s important to note an overwhelming 89 percent of impacted companies — those with 50 to 99 employees — already offer health benefits to their employees. For companies that already offer coverage, the change will have a minimal effect.

For small business owners, SHOP is open year-round and coverage can be purchased at any time. In order to begin the enrollment process now, entrepreneurs should visit their state’s health insurance marketplace or Healthcare.gov, or they can contact a certified health insurance broker who can assist with the enrollment process.

Brokers are well-versed in the ins-and-outs of the ACA, and there’s often no extra cost to utilize their services.

The bottom line is that while the new year offers changes in the small business health insurance landscape, small business owners shouldn’t be concerned. The best bet is to arm yourself with information; that way, you’ll be able to choose health coverage that maximizes benefits for your business.