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Health Care Reform Implications for Small Businesses


Financial Fitness March 2013 logoHow can small businesses prepare for PPACA? Karen Stern, member in charge of BSW Small Business Services, discusses the importance of addressing health care reform strategically in the firm’s inaugural Small Business Monthly “Financial Fitness” column.

On Jan. 1, 2014, according to the Patient Protection and Affordable Care Act of 2010 (PPACA), employers with 50 or more full-time or full-time-equivalent employees will need to choose between offering affordable health care insurance coverage or paying a penalty. Created to make health care coverage available to nearly all individuals, the PPACA mandates the minimum employee threshold. All companies, regardless of size, should consider the extent of health care coverage they will offer even though they may not be legally required to do so.

Many issues related to health care reform are more strategic than financial. They raise questions about hiring strategies, competitiveness in the marketplace, tax planning, compliance/monitoring requirements and growth objectives of the business. For example, you might ultimately be saving money by not offering health care, but if you’re unwittingly losing your best employees to a competitor, what are the real savings? Offering health insurance coverage to their employees can also allow employers to take advantage of various tax credits currently available. So, what can you do now to get ahead of these requirements?

  • Know where your business falls within the eligibility requirements.
  • Talk with your employees about health care options and the decisions you’ll be making.
  • Assess your currently provided health care benefits and costs.
  • Work with your accountant for a complete financial analysis of your business, including considering all available tax benefits.
  • Plan for implementing the requirements in effect in 2013, 2014 and in the future.


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