According to a survey conducted by the research foundation of the National Federation of Independent Business (NFIB), 48 percent of small employers plan to offer employee health insurance in 2014 even as the healthcare costs rise to nearly 12 percent average for 2013 as reported by the businesses. The survey was conducted on 921 businesses with two to hundred employees and was regarded as the first of a three-year look at how small businesses are adapting to Obamacare. Only 2 percent of surveyed employers revealed their intention to drop current coverage while just 5 percent said they would probably drop theirs. These findings of the survey are very significant in the backdrop of the Affordable Care Act (ACA) requirement of providing health coverage to employees by employers having at least 50 workers being delayed until 2015.
The survey found 64% of small business owners paid more per employee for insurance premiums in 2013 than they did in 2012. Around 29 percent indicated no change while only 6 percent responded of decline in healthcare cost. You may wonder how the businesses can manage their revenue in a scenario while providing more health coverage in 2014. It was found in the survey that small employers take several measures to cope with growing healthcare costs. The most frequent means of defraying increased costs are as follows.
- Took lower profits (66% of employers)
- Increased productivity (48% of employers)
- Delay, postponement or elimination of business investment (40% of employers)
The research also says 37 percent of small employers froze or reduced the salaries of employees to recompense the premium increases while 30 percent increased the cost share of employees. If 12 percent reduced non-health employee benefits, 17 percent reduced employment. While 30 percent increased their selling prices, just 17 percent took the tax credit to offset rising costs. Certain employers pass on the cost burden onto employees. The reasons for healthcare cost increases were not covered in the survey. However, employers can continue to implement these measures and enhance their revenues while they provide more coverage.
Cutting Back the Hours of Part-time Employees
There are two reasons why part-time employment is an issue for small employers under ACA such as the calculation of the 50 full-time or full-time equivalent of the employee threshold for the employer mandate. The employers must offer coverage to full-time employees but are not required to offer it to part-time workers. As per ACA, a full-time employee is one who works for 30 hours per week or more (or 130 hours per month or more) and a part-time employee is one who works less than 30 hours per week. To address this issue, certain small employers are cutting back the work hours for some people to have more part-time employees and fewer full-time employees. NFIB survey found that 13 percent of small businesses plan to reduce the work hours of part-time employees in 2014 and half of those cuts are related to ACA.
Overall, the survey gives us the insight that more employees would have access to healthcare in 2014. Healthcare providers would have to see a number of patients per day and would benefit from the service of a professional medical billing and coding company that will help streamline their workflow and receive accurate reimbursement.
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