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Affordable Care Act Offers Insurance Flexibility for Small Firms
If you’re a small-firm owner, what should you be doing about healthcare insurance for yourself and your employees? In light of the changes to the health insurance industry wrought by the Affordable Care Act (ACA), the AIA Trust commissioned a definitive report on the options for AIA members with small firms. “Health Care Options for Small Firms” by Ted Scallet, counsel to the AIA Trust, discusses how the ACA provides options that may make sense for small-firm owners.
Employers with fewer than 50 employees are not required to offer coverage to their employees; if they do, however, under the terms of the ACA they probably qualify for tax credits. Employees of employers that do not offer coverage are likely to receive ACA subsidies to purchase coverage on the private exchanges. The article cites a number of excellent website tools and offers tips for using the new healthcare legislation to your advantage.
Since small firms are not required to offer employees insurance—and many of their employees may qualify for subsidies—this approach could make healthcare coverage less expensive than what it currently costs small firms to provide it, enabling them to use the savings to compensate employees in alternative ways. Alternatives may include increasing employee compensation to help them purchase coverage on the ACA exchanges, or reallocating some of what small firms spend on healthcare to increasing contributions to retirement plans. A few more-complicated factors to consider are which types of compensation are taxable (contributions to retirement accounts, for example, are not taxable) and how to handle employees not previously covered by the firm’s health plan. New AIA Trust tools can help small firms make the decisions that are right for them.
The AIA Trust is continuing to explore options for offering a medical plan to members—check the AIA Trust Healthcare & Health Insurance Options webpage for updates. The Trust currently offers several ancillary health plans, such as cancer insurance and hospital income plans, as well as member plans for life, disability, professional liability, and many more risks. Check out the AIA Trust website for more details.