Help for Business Owners Struggling with Health Care Costs
When small business owners run their business funding calculations to determine their cash needs, health care comes up as a major expense with little return for the business. In fact, in between 1999 and 2007 health costs rose 113%. The government recently passed the Patient Protection and Affordable Care Act, which along with the jobs bill set to pass later this year, will address the problem of funding the health care reforms that have left many small business owners reeling at the potential future costs.
The Rise of the Insurance Exchange
The most notable change in how small businesses that meet specific criteria can reduce health care costs is through the implementation of health care insurance exchanges. Specifically, it will help small businesses that have fewer than 25 workers, with the average wage being less than $50,000. These small busineses will have to pay 50% of the premium cost through the insurance exchange, but the costs will be lower and the coverage better than if they did not join an exchange. In addition, those qualifying businesses can get a tax credit for the 50% they pay for two years, if they choose to use the insurance exchange. The health care insurance exchanges aren’t set to start until 2014.
Increasing Jobs by Managing Health Care Costs
The strategy to help small business owners manage health care costs is one targeted towards jobs. Every year that health care costs escalate, the choice to keep an employee or lay them off is made based on not only present day health care costs, but future ones also. Overall, the government hopes to save businesses in America $855 billion on health care costs that will hopefully act as a stimulus to hiring. Once small business owners are able to forecast their health care expenses more accurately, the fear of rising health care costs will impact their hiring decisions less and get them focused on creating jobs instead of cutting them.