Tuesday, December 31, 2013

Health law may hit midsize businesses hardest

The new year will bring tough new health care decisions for many businesses, especially those that are too small to easily absorb new costs and too big to think about dropping coverage, experts say.

These midsize businesses, particularly those with 50 to 200 workers, are having the toughest time affording escalating health care costs, says Nancy Taylor, a health care lawyer with Greenberg Traurig.

"I'm most worried about them," she says.

Federal regulators define small businesses for the purposes of the Affordable Care Act as those with 50 or fewer employees, so a midsize company by some definitions could be one 51 or 1,000 or more workers. A mandate for businesses with 50 or more employees to provide insurance to all full-time employees was delayed for a year. But businesses are already bracing for 2015.

Three ways midsize employers are feeling it:

•Taxes and fees.

Most of the largest employers are self-insured, which means the companies cover employees' claims, while insurance companies help administer the plans. Starting in 2014, businesses that are fully insured -- as opposed to self-insured -- will be hit with an $8 billion tax that is estimated to add 2%-3% to premiums for each covered employee.

This tax is expected to increase every year for the next several years. By 2018, It's expected to be about 4%. A so-called reinsurance fee of $63 for every person covered by a plan also kicks in for the new year. Read more >>

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