According to the National Federation of Independent Business (NFIB), 63% of small businesses were affected this year by the rise in insurance premiums, and 52% of those businesses suffered financial loss. 33% raised their prices to help cover the costs associated with the rise in premiums. Small business owners can expect their business health insurance costs to rise, per employee, with premiums increasing 8%, on average.
According to the Obamacare mandate, employers with 50 or more workers will be expected to pay $2,000 for each worker (excluding the first 30) if health insurance is not offered to 95% of its full time employees.
According to an NFIB survey of 900 small business owners, 52% did not cover employees’ health insurance due to costly premiums. However, in 2016 they will not have a choice. Small business owners will be left to decide whether paying the $2,000 per worker fine is more cost effective than offering employees a health insurance plan. The decision will become more difficult with the anticipation that business health insurance costs will rise as premiums continue to go up.
In addition, one of the changes to come in 2016 also will force employers with more than fifty employees to pay $100 per day- or $36,500 per year- per each employee if they reimburse employees for an individual health care plan, rather than subscribe to a group health care plan. The regulation previously affected only businesses with over 100 employees, as of last July. Currently, 16% of small business owners participate in this practice and reimburse their employees for health insurance or medical visits.
Only 13% of businesses had expressed an interest in purchasing insurance through the Obamacare SHOP exchange marketplace that was set up for small business owners to purchase health insurance. 52% out of the 60% of small business owners who do not offer health insurance cite high costs as being the reason they do not. While larger businesses have more resources to be able to purchase health care plans for its employees, many small businesses fear facing financial hardships due to the new regulations.
If you own a small business and have questions concerning the new health insurance regulations for businesses, or about providing your employees with health care, contact an experienced business law attorney who can best advise you regarding health insurance for your employees, and other legal matters concerning your business. Call Bellavia Blatt, PC at (516)873-3000 or (631)224-7000.