Making Affordable Care More Affordable: a PPACA FAQ

In March 2010, Congress passed the Patient Protection and Affordable Care Act (PPACA). Designed to increase access to quality and affordable health insurance and help employers manage health care costs, PPACA is one of the most extensive health care reforms our nation has experienced in decades.

While PPACA affects businesses of all sizes, you should understand its particular impacts on small businesses like yours.

What does the PPACA do?

For small businesses, PPACA is designed to:

  • Provide employees access to affordable health insurance
  • Give employers greater choice
  • Decrease insurance costs
  • Reduce firms’ administrative responsibilities

Who does it apply to?

While it has provisions for all businesses, smaller companies have different requirements based on their size:

  • Self-employed
  • Fewer than 25 employees
  • Up to 50 employees
  • 50 or more employees

Where do I start?

Read these guides from the U.S. Small Business Administration to learn which rules and mandates apply to each type of business. (But the bottom line is that small businesses with fewer than 50 employees are not required to insure their full-time employees.)

Also, a number of tax credits are available, designed to encourage smaller businesses to offer health insurance – see this IRS webpage for specifics.

Beginning in 2015, business with 50 or more employees will be required to offer qualified health insurance to their employees and their dependents, or pay a penalty in some circumstances.

What are the issues for smaller firms?

The 2014 Small Business Health Care Survey from the National Small Business Association shows that while small firms want to offer health insurance, costs continue to pose a major challenge. 91% of small businesses have reported increases in their health plan costs.

The monthly per-worker costs of health insurance premiums for a small business today is $1,132 – an increase from $590 per month in 2009.

The majority of employers think offering health insurance is a good way to recruit talented workers, but only a little over half of small businesses offer such benefits.

How does PPACA impact your business?

The PPACA laws continue to shift and change, but they impact businesses of all types and sizes. Do you have a grasp on the rules and regulations that impact your employees and your business?

For more info, talk with your tax advisor or health insurance carriers, and check out the official site of healthcare.gov.