Even though the health insurance legislation was passed in March, small businesses and companies are learning of the effects the new law could have on their company. One provision may require small businesses to pay penalties if health insurance costs for employees are considered to be too expensive for the employee.
The New York Times reports that if employers offer coverage to full-time employees but require the employees to pay a premium-that premium may not exceed 9.5 percent of their employee’s household income. If the premium costs more than 9.5 percent of their household income, that employee can apply for a subsidy from the government and then the government will penalize the employer.
This piece of the health insurance legislation could have a huge impact on retailers and restaurants. Typically these types of businesses do not offer coverage and may not be able to provide affordable coverage defined by the government.
Still the government has to define what coverage will be included in determining the affordability of the health insurance plans. Employees that have coverage for their entire family will pay more out-of-pocket than employees that only pay for individual coverage.
Many companies may change their health insurance plans to avoid the penalties. Yet it is uncertain how small businesses will gain information on an employee’s household income and whether that information will be readily available. Experts are worried that an employer knowing an employee’s household income could cause discrimination to hiring or firing an employee that gets subsidies for health care coverage.
Either way, small businesses will need to work with health insurance companies to find health insurance policies that will fit the all of the new requirements under health care reform.