Small Businesses May Cut Back on Family Healthcare Plans

Written by: Tony Lin

The Affordable Care Act, which is also known as Obamacare, is about to be implemented soon.  Although the business mandate has been delayed another year, the changes with the healthcare exchanges may drive small businesses around the nation to drop family healthcare plans.  This is because the minimum requirements of the ACA requires higher quality healthcare insurance plans than what exists in the market today.  As a result, many small businesses may be forced to “upgrade” to a better plan.  This increased in costs may be offset with more small businesses dropping family healthcare plans in order to focus on satisfying the minimum requirements of the ACA.

The problems with the ACA are as many as the positives that it brings to the table.  As a whole, the problems are generally “good” problems to have as the underlying assistance helps the workers and individuals who are most likely to be severely affected by catastrophic injury: low income and younger workers.  However, the root of the problem is that the US healthcare system is a half-hearted in between of fully government run healthcare and fully privatized healthcare.  The end result is that the individuals who will bear the brunt of the problems will be small business owners while large companies will benefit from an overall reduction in healthcare cost inflation.

This may been seen as proof that the ACA does not reduce healthcare insurance costs for the average person.  However, that is a misrepresentation.  The minimum premium on healthcare insurance will rise, but that is because the basic healthcare plans offered under Obamacare will be far more robust that the ultra-basic plans that they will be replacing on the bottom of the healthcare insurance totem.  Instead, the healthcare insurance exchanges will likely result in lower healthcare premiums for comparable plans, but the absolute price someone has to pay to get health insurance will rise.

Thus, small business owners may not be able to keep family healthcare plans as they have to contend with higher healthcare premiums and employer contributions. Many small business owners have already contemplated the problems and decided that making all current employees are covered is more important than keeping family healthcare plans.  If you are a small business owner or are working for a small business, it is likely that family plans may be dropped for the next couple of years.  The main problem is the uncertainty of and familiarity with the healthcare act, which has left many small business owners in the lurch.  As a result, they have taken the safest approach to protect their businesses and employees.


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