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Whether you work for a large or small business, have health care benefits or not, you will be affected directly or indirectly. The question is how will The Affordable Health Care Act impact you? Starting in January of 2014 the entire world of health care is going to change. With these changes, you must be aware of them if you want to take proactive measures.

Small Business Employees

Many people who work for a small sized company were less likely to have benefits because of the high cost of health care for the employer. Health Care reform may actually become more affordable for small business owners who have less than 25 full-time employees because of government subsidies. The tax credit created by the 2010 Affordable Care Act will allow these businesses to get a 50 percent reduction in the cost of providing health coverage. The only condition is that these companies must participate in the health care exchanges set up by the states. Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance.  Each exchange will have a plan that offers a bronze, silver, gold, or platinum package according to their price and the type of coverage they offer.

The good news is that a 50 percent discount will provide more opportunities for employees who could not previously afford coverage to finally gain access to healthcare. The bad news is that a 50 percent reduction of a number that has doubled is no benefit at all. In other words, we will have to see if the tax credit will be enough to give small business employees enough of a cost break to maintain their current standard of living.  As of the time of this writing, some experts suggest that the cost of healthcare purchased through the state exchanges will be sold at prices below-market value. Since healthcare reform will require everyone to have coverage, employees will be less likely to remain with an employer simply because they offer healthcare and another employer doesn’t.

Large Business Employees

Employees who work for large business are certainly more likely to have healthcare now, but that could drastically change in 2014. Businesses that have over 50 employees will be forced to pay $2,000 per employee each year if they do not provide healthcare. While that seems like a hefty fine to pay, companies could literally save hundreds of thousands to millions of dollars by not providing health care.

According to Kaiser Family Foundation, the average cost of individual health insurance was $5,615 per year. Using this very simplified averaging method, an employer with 100 workers would pay approximately $561,500 in healthcare premiums. If these same firms take the penalty, they would pay $200,000. That is a $361,500 cost savings, which could theoretically be the difference between people keeping and losing their jobs.

It is nearly impossible to predict how these changes will impact small and large employees because there are too many variables to consider. Healthcare providers have to contend with increased operating costs, which drive up prices. These price increases mean that this cost will affect the people employed will pass along to both small and large employers, and therefore, those employed by these companies may take the brunt of this economic blow.

Short Term Medical Health Insurance may be a viable way to get coverage at an affordable price until you figure out how health care reform is going to affect your health insurance and health care.

Looking at Your Options…There are health insurance options which you can explore today in anticipation of health care reform. If you reside in the southern California area, feel free to contact me to explore your options, or sign up for our Newsletter which will notify you of our upcoming Insurance and Financial Planning Seminars in the Greater Los Angeles and Southern CA areas. My contact information is below…