What Does the Affordable Care Act Mean for Smaller Contractors?

It might seem like most of the recent discussion around Health Care Reform has focused on larger employers. This may be true, given that employers with 50 or more FTEs will face penalties if they fail to comply with the Affordable Care act by January 1, 2014.

However employers with fewer than 50 FTEs should not ignore the implications of the mandate for all individuals to have health care. There are several potential consequences that will definitely impact employers of all sizes.

1. Most people in the workforce are just one serious illness away from financial hardship and medical debt. Should one of your workers or their family members become ill, and lack health insurance, the financial stress is sure to affect their morale and productivity.
2. Failure to offer health insurance is an invitation to employee turnover. The most skilled and experienced workers are likely to seek an employer that offers coverage, particularly if the alternative is having to navigate the marketplace and/or exchanges on their own. A recent draft of the “E-Z” form being developed by HHS to determine whether a person even qualifies for subsidies is 21 pages long.
3. Smaller government contractors will be competing for public works contracts with large companies that are subject to the mandate. Large employers that use fringe dollars to provide health insurance will realize significant savings on payroll burden, which in turn makes their bids more competitive. How will you gain an edge?

There are tax credits available for smaller employers who offer health insurance coverage which meets minimum standards under the Affordable Care Act. To find out if your business qualifies, view the calculator on the IRS website.

The Contractors Plan can help you devise a strategy that helps you use the Affordable Care Act and fringe benefit dollars to the advantage of both your company and your employees. For more information, contact us: info@contractorsplan.com.