The Affordable Care Act may require a business plan adjustment

In the past, small businesses in Maryland and elsewhere in the country used to receive discounts from health insurance carriers for healthy employees, while others were assessed a surcharge for employees who experienced numerous health issues. Beginning this year, the Affordable Care Act mandated that those discounts and surcharges cease. This will most likely require an adjustment to a company's business plan -- especially if it was receiving a discount.

The consensus is that this new rule gives every business an equal chance at providing quality health insurance coverage to its workers. The premium a group will pay now only varies by location, the age of participants and whether any employees smoke. In some cases, small companies could see an increase of up to 40 percent in premiums. Other businesses could receive a windfall since they will no longer be paying a surcharge, which means a savings of up to 30 percent for some companies.

For those who will see an increase in cost, this new rule is causing many businesses to rethink their options regarding employee health insurance plans. Some small businesses may have to stop providing health coverage to employees, and others may have to pass on any increase to their workers. Limiting the benefits provided to employees by changing coverage may also be a viable option.

Small companies may need to reassess some of the legal and business decisions made in the past in order to accommodate these changes. No matter how each Maryland small business decides to deal with the issue, it could necessitate reworking the company's business plan. Many plans include projections for the future, and changes in the health care laws could affect those projections.

Source:, "Premium spikes catch up with small businesses", Christopher Snowbeck, Oct. 13, 2014

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