How to Understand and Survive the Era of Obamacare Smallbiz Uncertainty

surgery doctor hospital public domainIf you have any close relationships with physicians who operate private practices in your area, you may know the headaches they suffer trying to get all their paperwork done property to satisfy private insurers and government agencies.

Local doctor groups need to have a department of employees dedicated to nothing but coding their forms correctly. That kind of chronic pain has now come to small business owners, thanks to the Affordable Care Act (ACA).

Companies with 50 or more employees are required to document the number of hours and absences their employees rack up and how much they spend on health insurance. All of this will be reported to the IRS to determine how many workers are averaging more than 30 hours per week and therefore must be provided with health insurance.

Additionally, small business owners need to track the months an employee is covered by health insurance and the cost of premiums so the government can determine if the coverage falls under its definition of “affordable.”

Big paperwork price tag

A survey conducted by the National Small Business Association estimates that the cost of compliance will average more than $15,000 for small businesses. Question: Are these new costs of compliance being included in the cost of “health care”?

John Haslinger, a vice president at ADP Benefits Outsourcing Consulting, told the Associated Press that the software and databases that track attendance, payroll and benefits are typically separate systems, so there isn’t an easy way to combine them in the manner required by the IRS.

The health insurance brokers that work with local small businesses may be able to provide these extra services, but they will come at a cost. One San Francisco-based flooring company reports paying some $25,000 a year to outsource these extra record keeping and reporting activities. Along with insurance brokers, payroll providers and HR firms are adding ACA-related services to their menu.

If you’re running a legacy software system to handle payroll and related areas of your business, you might consider bringing in a coder to add the features you need to comply with IRS reporting requirements. However, there is certainly no guarantee that the law won’t change in the next couple of years, so your software tweaks could be outdated about as soon as they go live.

Senators seek additional delay

In fact, just a week or so ago a group of Democratic senators asked for yet another delay in ACA implementation that would impact small businesses. These senators – all up for reelection in the next cycle – asked Human Services secretary Sylvia Matthews Burwell to delay the rule that puts companies with 51 to 100 employees in the “small group” market instead of the “large group” market. Premiums are higher in the small group market and this rule is currently set to take effect in 2016. These senators don’t want businesses in their districts getting hit with premium hikes too close to election day.

No matter what your personal position is on the ACA, I think we can all agree that we need stability in the health insurance market. At least then costs will become more predictable and small business owners can formulate expansion plans with some degree of certainty. Further, service providers will be able to design systems that fit the needs of small businesses. More will be encourage to do so and that should lead to more competitively priced services.

Right now the best advice for small business owners is probably to hunker down, kluge together something to meet the current requirements of the IRS, and see where we are a year from now.

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