Obamacare is bringing some titanic changes to the small business health insurance markets in the United States. One of the biggest is the shift away from employer sponsored health insurance to private and public market exchanges. Where this is most readily apparent is the way that Obamacare is affecting part time employees with small business health insurance.
Under Obamacare, employers of certain small businesses are required to provide health care for their employees or be subject to substantial penalties. However, there are several exemptions to this requirement. For example, part time workers, defined as those who work less than 30 hours per week, are exempt from the requirement. It is thus not surprising that many businesses have deliberately started to cut back the number of hours of its employees to below 30 in order to escape the costs of complying with Obamacare.
Some small business health insurance plans already cover part-time workers. One might think that given they already provide insurance to the employees that the mandate to provide coverage is not a big deal. However, most of these plans provide few benefits. Under the Obamacare mandates there is a minimum level of threshold coverage that must be made available for each plan that an insurance company supplies. Simply put, in order to continue providing health care to its part-time employees, most small businesses would see the bill that they pay go up dramatically once Obamacare is fully implemented. Given that enrollment of young individuals is much lower than many Obamacare supporters expected, these costs could skyrocket further to unimaginable levels.
It is not just small businesses who are looking to stop providing insurance for part-time employees because of Obamacare. Well funded corporations such as Target and Home Depot announced in the latter half of 2013 that they would be dropping coverage for their part-time employees. Even Trader Joe’s which is known to offer some of the more generous plans to its employees is cutting insurance altogether for part-time workers.
While many part-timers might be dismayed to see their employer based insurance disappear, they could still be better off under the law. Most of these people will be deferred to the new Obamacare exchanges. Since most part-time workers tend to make low wages, many of them will qualify for public subsidies for their insurance. As a result, they could be getting many more benefits than before at a lower cost. However, they will have to undergo the stress of trying to navigate through the various options on the exchanges themselves.
Others who happen to live in households that make higher income could be much worse off. Subsidies cut off at above 400% of the poverty level, or roughly $45,960 right now. People above this level will have to bare the full brunt of sky high Obamacare premiums due to all the mandates on insurance companies.
With the rollout of Obamacare, small business health insurance will never be the same. Many people will see themselves reduced to working part time hours, while others who are already part-timers could end up with better coverage under Obamacare than they receive right now.
Small Business Health Insurance
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