Several provisions of the Affordable Care Act (“Obamacare”) will impact small business owners and their employees. Many of our restaurant clients have expressed concerns about the cost of providing health insurance for all of their employees or otherwise being forced to pay a tax penalty. For those who are worried, the Obama Administration’s recent announcement that the mandate will be delayed until 2014 comes as a relief. This extra year will allow business owners needed time to plan for the upcoming changes.
While the mandates for small businesses may be daunting, there are several things that business owners should keep in mind. For starters, not all businesses will be affected. The term “small business” is somewhat misleading; only employers who have 50 full-time (or “full-time equivalent”) employees are mandated to obtain health insurance for their employees. One “full-time equivalent” employee is defined as two part-time employees, for example. Many restaurant owners employ less than 50 full-time employees and therefore will not be affected.
What if you have more than 50 employees?
The restaurant owners who fall into this category are arguably more affected than other business owners due to lower profit margins in the restaurant industry and higher employee turnover rates. Some owners may feel that it makes more sense to pay the penalty than comply with the mandate, but this may not be true. According to proponents, Obamacare’s tax credits for small businesses purchasing insurance and the creation of the SHOP Exchange (“Small Business Health Options Program”) – a new, competitive marketplace where small business owners will be able to shop for private health insurance – will help lower costs.
If you have questions about how the Affordable Care Act will affect you and your employees, contact our law offices for a free consultation.