I continue to hear lots of misinformation out there about Obamacare and small business. Here are three common myths and corresponding facts.
Myth 1:
Many people who wanted to start a business won’t do so because it’s going to be too expensive to either get insurance for their employees or face a big fine.
Employers with fewer than 50 employees are not required to offer health coverage. Therefore, there is no penalty or fine that applies to start-ups. Most small businesses I know, start out with 2-10 employees. After a few years, those who are successful will increase to about 25-30 employees. Very few ever go over 50 employees. And my observation is supported by statistics. According to money.cnn.com in 2010, there were about 5.7 million small employers (defined as 500 or fewer workers) in the US. Of those, only 3% have more than 50 employees. That means Obamacare’s employer mandate does not apply to 97% of the country’s small businesses. And certainly not to start-ups.
Employers will be fined $100 dollars per day if they don’t notify employees about the new healthcare exchanges.
Fact:
Although it’s true that there’s a little known provision requiring all employers (even those with only one employee) to inform their workers about the new health insurance marketplaces, according to Small Business Administration officials, there is no penalty for failing to provide the notice. So yes, the requirement to inform is there but there is no penalty because there will be no enforcement. The SBA has model templates of the notice (to be given within 14 days of hire) available on their website.
Myth 3
If employers choose to offer health coverage, they must do so through the exchanges.
Fact:
Employers (just like individual consumers) can still purchase coverage through a private broker or directly from an insurer. The exchanges simply offer competition to the existing market.
Look, there are many reasons not to start a business such as the financial instability, sleepless nights, and 12-hour days. But myths of healthcare costs for your employees, or having to pay fines should not be one of them. Share the facts.
Source: www.washingtonpost.com and www.sba.gov
