Small and Narrow: Health Insurance Changes

by Karen Stern

Staying compliant with the Affordable Care Act (ACA) hasn’t been easy for many small employers. This year, employers with 50 or more full-time-equivalent (FTE) employees had to provide health insurance to at least 95 percent of their full-time employees or face a fine. Even if you were prepared for these changes, you probably faced more compliance and reporting requirements than you anticipated.

Not only has implementation been difficult, but legislation surrounding the ACA has been modified multiple times since its inception. This includes the way in which health insurance is made available. Small employers and individuals often receive insurance through an insurance exchange; however, many major insurance companies have stopped offering plans on the exchanges, as they have suffered large financial losses.

In addition to a decrease of insurance options through the exchanges, the issues many small businesses (fewer than 50 FTEs) are facing as they try to remain compliant include:

• Narrow networks. High-performance, “narrow” networks allow health care plans to preserve benefits and keep premiums affordable while offering a smaller provider network, which may impact an employee’s choice of hospital or physician.

• Higher premiums. Insurance premiums have increased, and small-business owners are forced to shift some of that cost to the employee to help cover the increase.

• Increase in compliance reporting. Incorrectly reporting health care coverage costs and services covered will result in potentially large fines.

If you have questions about your small business’s insurance options or about remaining compliant with ACA regulations, contact your adviser or Ron Present at rpresent@bswllc.com.

Karen Stern, CPA, (kstern@bswllc.com), partner in charge, Brown Smith Wallace Entrepreneurial Services Group, provides tax and accounting services for companies ranging from start-ups to $20 million in revenue.