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How Businesses Benefit From the ACA

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How Businesses Benefit From the ACAOne of the main ways the Affordable Care Act (ACA) is encouraging Americans to purchase affordable healthcare is by making changes with employers, which trickles down to employees. What better way to get Americans to purchase health care than through their workplace? In order to get employers to offer affordable healthcare to their employees, the ACA offers incentives to small and medium-sized businesses. When most people think of the ACA, they associate benefits with individuals and large corporations, but there are actually quite a few benefits for small businesses that are ACA compliant.

Health Care Tax Credit for Small Businesses

The ACA extends tax credits to help small businesses offset the cost of healthcare coverage for their employees. The tax credit is designed for small businesses with fewer than 25 full-time employees. If the employer pays average wages less than $50,000 and contributes 50% or more toward their employees’ healthcare coverage, they will most likely qualify for the credit. Businesses that purchase healthcare coverage through the Small Business Health Options Program (SHOP) may get credits worth up to 50% of the employer’s premium.

The Small Business Health Options Program (SHOP)

SHOP is available to most businesses with up to 50 employees. Unlike large corporations, which often have the resources to purchase high-quality healthcare, small businesses had few options before the ACA. SHOP focuses on connecting small businesses with high-quality coverage at affordable rates. SHOP also greatly reduces the administrative confusion to implement new healthcare plans, which reduces the cost of purchasing them. Additionally, SHOP enrollment is year-round, meaning small businesses don’t have to wait for open enrollment to get savings on new healthcare plans. Essentially, SHOP makes it convenient and affordable for small businesses to offer employees high-quality healthcare.

Wellness Program Incentives

Employers are highly encouraged by the ACA to offer their employees workplace wellness programs. They ACA does this by offering incentives to employers who enact a wellness program. Typically, programs reward employees who make healthy lifestyle achievements, like quitting smoking or lowering cholesterol. Under new ACA regulations, employers who offer workplace wellness programs will now be able to receive 20-30% off the cost of healthcare coverage premiums. Employers who offer specific programs, like those that reduce tobacco use, may be eligible to receive up to 50% off of premiums.

Enforcing High-Quality Healthcare

Insurance companies are now required to spend at least 80% of premium monies on medical care over administrative costs. This ensures that healthcare coverage is high-quality and affordable. Any insurance company that do not meet this regulation are required to provide rebates to policyholders, whether individuals or companies. In most cases, the rebate goes to the small business employer. Employers are able to determine how to allocate rebates.

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