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ACA and Entepreneurship (view source)
Revision as of 15:46, 27 September 2016
, 15:46, 27 September 2016no edit summary
A small business may attempt to avoid and alleviate the increased costs of insurance coverage by opting out of employer-sponsored health care or increasing the employee contribution to coverage if possible with cost-sharing. Additionally, firms might also consider participating in the SHOP Exchange; negotiating on private insurance plan prices; and switching from group plans to individual employer-sponsored options, such as Health Savings Accounts (HSA), Health Reimbursement Accounts (HRA), and direct primary care [http://www.cnbc.com/2015/01/08/5-smart-ways-small-firms-can-slash-health-care-costs.html].
The SHOP (Small Business Health Options Program) Exchange, created by the ACA and intended to earn small businesses lower health insurance rates by using group plans and tax credit. SHOP offers increased employer choice functions, enabling employers to choose from a larger pool of available coverage options for employees . [18http://digital.library.unt.edu/ark:/67531/metadc501935/m1/1/high_res_d/R43181_2015Jan15.pdf] The financial advantage of purchasing insurance through the SHOP exchanges remains uncertain, however, because insurers in the marketplace will still be unable to charge premiums based on health status. Additionally, workers participating in SHOP will become ineligible for subsidies once they have to buy their own insurance [19]. Notwithstanding these limitations, SHOP offers small businesses increased buying power in the group-plan market - an advantage once possessed only by larger firms - and a simpler mechanism for comparing prices, coverage, and quality of plans . [20http://obamacarefacts.com/insurance-exchange/shop-exchange/].
A temporary health insurance tax credit is available to firms with 25 or fewer employees and making less than $50,000 in annual wages. However, many firms do not meet the strict requirements necessary for obtaining the tax credit that would cover up to 50 percent of employer contributions to employees' health insurance premiums and up to 35 percent for tax-exempt employers. According to Holly Wade, the director of research and policy analysis for the NFIB Research foundation, "the small business tax credit is a better talking point than it is a financial incentive for small businesses" [24].
