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Affordable Care Act affects small businesses differently

Tuesday, October 08, 2013

Open enrollment is underway through the Affordable Care Act (ACA), and many businesses are scrambling to meet the employer mandate to notify and provide health insurance for employees. But not all businesses will be affected the same way.

An empty yard is a welcome sight for father and son Tim and Peter Schneider at TGS Transportation. All their drivers are out working, hauling cargo across the state.

The Schneider's have always provided insurance to their nearly 50 employees, but the family owned business is racking up extra administrative costs ahead of the Affordable Care Act.

"We've spent hours and hours preparing to get all the information, the paperwork out, so that our employees are educated," said Peter Schneider.

Schneider fears his existing insurance premiums will jump 30 to 40 percent with the implementation of the ACA.

"Since the recession most companies have razor thin margins," said Peter, "We'll have to look at cutting back any overtime."

Whether the business is a national chain or a locally based small business, the Affordable Care Act can be complicated and confusing. The basic rules are based on the number of employees, but even that's not so cut and dry.

You are based on full time employees, but you may have part time employees. So how do you calculate those part time employees together?" asked Nathan Powell, Dowling, Aaron & Keeler. "If you're over 50, that's when you get hit with having to provide minimal essential coverage, it has to affordable, it has to meet all these different requirements and if you fail to do so, you're gonna get penalized."

Penalties can be as much as $2,000 per employee per year. That penalty has been delayed until 2015, but Powell, a healthcare and business law expert, said businesses can't afford to put off providing insurance. "It's going to apply from the year previous. And so a lot of people are saying I'm just going to kick the can down the road and wait til 2015. But they have to realize that the things they do in 2014 are really going to affect what they have to do in 2015."

One incentive for smaller businesses to provide employees insurance, even though they aren't required to, are tax credits.

The owners of Merced Gardens and Nursery, Brad and Stephanie Parkinson, have five employees. Many of their employees can't afford health insurance on their own. So when the Parkinson's heard about the Affordable Care Act, they jumped at the chance.

"Technically, by law, it doesn't affect me. But we embrace it wholeheartedly for small businesses because it gives people the opportunity to have health care," said Stephanie Parkinson.

The Parkinson's see it a responsibility for business owners to not only create jobs, but keep employees happy and healthy.

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affordable care act, health_care_reform, christine park
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