Small businesses are the backbone of the nation's economy. Everywhere you go, you see small mom and pop establishments with a few employees to larger scale companies with dozens of employees.  Unfortunately, according to various studies, small businesses have health insurance costs about 18% higher than large companies.  As a result, many small businesses have not offered health insurance and others struggle with offering health insurance.

In March of 2010 two Health Care Reform bills were enacted into law.  This will have an impact on small businesses in various ways.

In general, the health care reform bills provide relief to small businesses who provide health insurance coverage to their employees.  Over time, there are multiple provisions that employers, as well as, individuals will need to be aware of.  In particular for small business, there is a health care credit for companies who do provide coverage if certain criteria are met.

Employers who do not offer coverage presently will either have to provide coverage or pay for a voucher so that employees may obtain coverage on health care insurance exchanges by 2014.  Interestingly, as of January 2011, more small companies are offering health insurance coverage than before, possibly due to this credit. 

Of note, large businesses (over 200 employees) will be required to have health insurance for all full time employees by 2014 and automatically enroll them. 

The net result of all of this is that it appears that companies currently not offering health insurance will lose their advantage on competitors who do offer health insurance and that most companies will be on a level playing field with regard to health care going forward.  Many small businesses will therefore likely enjoy a net benefit with Health Care Reform as it will help lower their insurance costs and help them to remain profitable, particularly those that were already providing health care insurance.  

Over the next few years, we believe that small businesses will be confronted with rising insurance costs as insurance companies attempt to squeeze out the highest profits possible before certain rules regulating them take effect in 2014.  While this may appear to some that health care reform is not working, we advise to take a longer term view.  It is our opinion, that while we might lose business on commission driven health insurance plans, that overall the health care reform, despite needing tweaks and simplification, will begin to level health care costs by the middle of the decade.  

If you are a small business owner or administrator of a small businesses health care plan, carefully considering options for the present and immediate future while planning for the post 2014 health care landscape will be very important. 

In general, we believe that selecting plans based upon coverage is more important than premiums.  While for many there is pressure to cut costs, which is understandable in today's economic climate, sacrificing coverage may not be the right solution.  It is a complex task to select the right health care insurance.  We can help you find the right solution, potentially a creative one you have not considered or been presented with.  If you would like us to review your plan with you, at no obligation, Contact us and we will be happy to meet with you and develop a relationship that will benefit you and your company.