ACA Changes Provide Big Opportunities for Small Businesses

by Samantha Beasley, Senior Manager of Health Care Policy, L.A. Area Chamber

Under the Affordable Care Act (ACA or Obamacare), all health plans must now have 10 essential benefits, including hospitalization, prescription drugs, maternity care and mental health treatments. Any health plans that do not meet all 10 requirements were to be canceled at the end of 2014, but Gov. Brown signed SB 1446 last July, giving California’s businesses with fewer than 50 employees an extra year to obtain ACA-compliant health coverage. If the eligible businesses' sponsored health plans still do not meet the law's requirements at the end of this year, such plans will be canceled.

As a member of the Advisory Board for Covered California for Small Business (formerly SHOP), I am seeing a growing pool of evidence as to just how significant this change will be, with estimates that 70-80 percent of California’s small businesses have plans that are not compliant. Of further concern are the results of a recent survey wherein the California HealthCare Foundation found that the percentage of employers offering coverage continues to decline in California, and many covered workers are seeing reduced benefits and/or increased cost sharing.

But even with the coming plan changes and the reality of, in some cases, premium increases that are putting pressure on their bottom line, business owners have a real opportunity to maximize the value of their company.

As recently stated in the Washington Post, “To squeeze employees and pay only 50 cents on the dollar doesn’t help the employee who has to spend $800 a month on self and family coverage. This can cause employee dissatisfaction and turnover of a company’s tenured workforce – which is one of the most critical strategic assets for any small business.

By taking a more broad-minded and long-term approach to health insurance and other benefits, you can change the dynamic of how you compensate employees, how you retain talent and, most importantly, how that all translates into higher value for your company and maximize profit in a future sale.”

The fact is, most small employers look to trim and reduce, when they should really consider efforts that enhance and educate. Offering a richer health insurance program – one that can benefit employees no matter how they plan to use those benefits – will set a small business apart from the competition and enhance both employee recruitment and retention.

In addition, it’s essential to think about wellness programs that can not only increase employee engagement, but also add to the positive experience each employee enjoys as part of the team. From smoking cessation, to Fitbit competitions and Fitness Fridays that emphasize eating right here at the Chamber, I can attest that having a company culture that supports and emphasizes a healthy environment benefits employees time and time again.

Again quoting the Washington Post, “… by using Obamacare to your advantage, you can change the dynamic and make a conscious shift by covering more of a consumer-driven healthcare plan that entices employees to be aware, accountable and stay as your employees. Remember, it costs significantly more to hire and train a new employee than it does to work with a tenured employee and attract them to stay. An employer who creates a successful paradigm shift in this arena will build a stronger and more profitable organization.”