Julio Cortez, Associated Press
NEW YORK — A critical date is approaching for small business owners: Starting Oct. 1, they must make decisions about employee health insurance under the Affordable Care Act.
All companies have obligations under the ACA, no matter how many workers they have or whether they plan to provide insurance. They must provide information about insurance to employees. They need to think about what kind of insurance to provide, and whether to get it through a broker or to use the state or federal exchanges known as SHOP, or the Small Business Health Insurance Options Program.
Many owners are still in the dark. Tim Finnell, an employee benefits broker and consultant in Memphis, sees that when he holds seminars for small business owners. One last week drew 200 people.
"The average person doesn't know what's going on," says Finnell, president of Group Benefits LLC.
Many owners also have incorrect information, says Matt Thomas, president of Worksmart Systems, an Indianapolis-based company that provides human resources services. Many believe that the Obama administration's decision to give companies a reprieve from paperwork requirements until 2015 means they don't have to comply with the rest of the ACA. That's not true.
Here are three things that small businesses should be doing now:
GET UP TO SPEED
Owners need a basic understanding of the ACA, know what's required and get familiar with the insurance plans in their states.
"They need to understand the exchanges, the difference between individual exchanges and the SHOP," says Lisa Keith, president of Princeton HR Solutions in Princeton, N.J. "They need to understand minimum value (the government's definition of affordable insurance).
States also have websites but not all are fully functional yet. All are supposed to be operating on Oct. 1.
Owners should learn about the tax impact of the ACA. For example, there are tax credits available to some companies that buy insurance through the exchanges.
The education process shouldn't stop Jan. 1. Owners should keep up with changes to the law that may continue into next year, says Bill Norwalk, a tax accountant at Sensiba San Filippo LLP in Pleasanton, Calif.
The ACA is complex and has spawned thousands of pages of regulations. Owners should get help from a professional, whether it's an insurance broker, benefits consultant or an attorney who specializes in health care law.
"There's absolutely no way that an employer of any size, with the continuing moving parts, can know all of it," says Nancy Thompson, a vice president with CBIZ Benefits & Insurance Services in Columbia, Md. "Employers need to be with someone that is strategically working with clients to help them navigate it."
The law has many details and nuances, says Vince Ashton, CEO of HealthPass New York, a private health insurance exchange for small businesses. For example, one benefit that insurance plans must offer is children's dental insurance. But most medical plans won't include it, and owners should buy a separate policy, Ashton says.
His recommendation: Talk to a broker.
"They're going to know what the different (insurance) carriers are doing, how they're changing their plans, what benefits are changing, how benefits are changing," Ashton says.
Sandi Webster, owner of a marketing consultancy in Newark, N.J., doesn't have the time to navigate the ACA.
"We have to marshal outside forces to help us figure it out," says Webster, owner of Consultants 2 Go.