November 06, 2014 Business Resources

A Small Business Owner’s Guide to Health Care Reform

Small businesses are the backbone of the American economy, but they are bearing the brunt of some tough regulations, thanks to the Affordable Care Act (ACA). I’d like to use this opportunity to offer some tips on how small business owners can get the biggest bang for their health care bucks.

What is a small employer? New York state defines small businesses as those having 50 or fewer employees. In 2016, that number is set to increase to 100 or fewer. If your business falls into one of these categories, then you are not required to provide coverage to employees under the employer mandate.

However, you’re not completely off the hook. The ACA is imposing a series of new taxes and fees that will likely increase health care costs for small businesses. In addition, small businesses that offer coverage must provide certain essential health benefits that include emergency services, hospitalization, maternity and newborn care, prescription drugs, pediatric dental coverage, mental health and substance abuse services, preventive care, wellness benefits, and other services.

The Small Business Marketplace provides several coverage options for your employees, including a single health plan or a few plans from which your employees can choose. You can also offer your staff a defined contribution (i.e., an allowance) and let them choose their own plan. If you participate in the Marketplace as a small business owner, you might become eligible for tax breaks if you have fewer than 25 full-time employees or if your workers’ average wages are less than $50,000 per year.

Sole proprietors. A sole proprietorship is a business owned and operated by a single person and is not considered a small business. These folks must adhere to the individual mandate, which requires them to either obtain coverage or pay a penalty.

How can I purchase coverage for my employees? You have two options for purchasing coverage:

  1. Directly from a health plan
  2. Work with a broker
  3. Small Business Marketplace

Purchasing health coverage is not only a significant expense for an employer, it’s also crucial for maintaining a healthy workforce and providing quality benefits for your employees. That’s why working with a health plan representative who will answer questions and offer guidance will help ensure that you’re making the best possible choices.

What questions should I ask before selecting health care plans for my employees?

  • How broad is the provider network and prescription drug formulary? From doctors and hospitals to pharmacies and urgent care centers, you want to make certain that your employees have a solid network of providers from which to choose. Likewise, a comprehensive drug formulary will ensure that their prescription needs are met.
  • What are standard and non-standard plans? A standard plan is a federally mandated, qualified health plan that is sold through the Marketplace. A non-standard plan could include different kinds of cost-sharing arrangements or benefits.
  • What wellness benefits are offered through the health care plans I’m considering? Some plans include gym memberships, weight-loss programs, or fitness classes. CDPHP® can work with you to find a plan that includes the benefits that are most important to your employees.

Make the most of your health care dollars

CDPHP is here to provide you with the ultimate value solution. There’s a lot to learn in the ever-changing insurance world, and we’re staying on top of the requirements, benefits, and ways to save money – for everyone.

Photo by Tax Credits / CC BY

John D. Bennett, MD, FACC, FACP
About Author

Dr. Bennett was named president and CEO of CDPHP in 2008, after serving as chairman of the board since 2003, vice chairman since 1999, and board member since 1996. Prior to working at CDPHP, Dr. Bennett served as chief of the division of cardiology at Albany Memorial Hospital, was a member of Northeast Health Systems’ board of directors, and chaired the department of medicine. Dr. Bennett also served as CEO of Prime Care Physicians, PPLC, where he practiced cardiology with Albany Associates in Cardiology. Dr. Bennett chairs the board of directors for the Albany-Colonie Regional Chamber of Commerce and the Healthcare Information Xchange of New York (Hixny). In addition, he is a member of the boards of the Alliance of Community Health Plans, America’s Health Insurance Plans, Colonie Senior Service Centers, the American Red Cross of Northeastern New York, the Center for Economic Growth, New York eHealth Collaborative (NYeC), and the Palace Theatre. Dr. Bennett earned his medical degree from SUNY Downstate Medical Center, Brooklyn, and a bachelor’s degree from Rensselaer Polytechnic Institute. He completed his residency in internal medicine as well as a fellowship in cardiovascular disease at Albany Medical Center. Currently, he is a Fellow of the American College of Cardiology and the American College of Physicians. Dr. Bennett is board certified by the National Board of Medical Examiners and the American Board of Internal Medicine, with subspecialties in internal medicine and cardiology.

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