Updated: Wed, 01/09/2013 - 08:31

Small business owners get advice on Affordable Care Act

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Seacrest Partners' Steve Eagle outlines the Affordable Care Act during Tuesday's Smart Lunch presentation.    Photo by Adam Van Brimmer/Savannah Morning News
Photo by Adam Van Brimmer/Savannah Morning News
Seacrest Partners' Steve Eagle outlines the Affordable Care Act during Tuesday's Smart Lunch presentation.
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Small business owners preparing to abide by the Affordable Care Act were advised Tuesday to use the same approach as they would in eating an elephant.

“Bite off a bit of it at a time,” said Steve Eagle, managing partner and an employee benefits consultant with Seacrest Partners.

Eagle laid out the basics of the so-called Obamacare legislation during the Small Business Council SMART Lunch meeting in the Savannah Morning News Auditorium. Eagle’s presentation underscored the complexity of the legislation slated to take effect in 2014 and its impact on small businesses.

The bottom line for employers with at least 50 full-time workers, Eagle said, is they must meet a mandate for minimum health care coverage for their employees or face penalties. Each employee’s share of the premium cost cannot exceed 9.5 percent of his or her wages to be considered “affordable” under the law.

Small businesses with 49 or fewer employees are exempt from penalties but those that do offer health care benefits will likely face higher costs, although the government will offer tax credits to small businesses with 25 or fewer employees that do provide coverage.

All small businesses will see their tax credit increase to 50 percent in 2014 to help offset the cost of providing insurance.

“To call this health care reform is a misnomer,” Eagle said. “It’s about mandates, subsidies, penalties and taxes. And it’s constantly changing.”

Eagle cited a 144-page update to the legislation issued on Dec. 28. The federal insurance exchange, which will be the marketplace for Georgians not covered under employer plans, is still being established. More changes are likely coming, Eagle said.

The choice many small business owners face with the Affordable Care Act is whether to continue to offer health insurance coverage or eliminate the plans and send employees to the federal exchange. For businesses with 50 or more employees, the penalty for not doing so ranges from $2,000 to $3,000 per full-time employee or full-time equivalent.

Those businesses with 25 or fewer employees that pay average annual wages below $50,000 and choose to offer health insurance can qualify for a tax credit of up to 35 percent.

Eagle summed up his advice to small business frankly, saying, “Keep calm, work it off bite by bite and hopefully you won’t get hosed.”

 

LEARN MORE

Go to www.healthcare.gov to learn more about how the Affordable Care Act will impact employees and employers.

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