The passage of the Patient Protection and Affordable Care Act (PPACA)of 2010 has many U.S. small business owners fretting over what the law will mean for their healthcare costs and hiring potential. The employer insurance mandate included in the Affordable Care Act states that U.S. small businesses with more than 50 full-time employees will be obligated to provide health insurance coverage for their employees, or they will face a substantial fine for each full-time employee who is not offered coverage.
In the present marketplace, workers face extreme difficulty in obtaining coverage if their employers do not provide health insurance coverage. Insurance premiums can cost a family of four in upwards of $10,000 annually, putting reliable health coverage beyond the reach of millions of families who would not be able to sustain those out-of-pocket costs. Fortunately, there is an option for small business employers who want to offer health insurance coverage to their employees (and consequently avoid the fine associated with not doing so). The Small Business Health Options Program (SHOP) is a federal program that gives small business owners much more control over healthcare plan purchases for their employees. SHOP can bundle services and allow small business owners to directly compare many different plans from healthcare providers.
In an era of shrinking wages, small business owners increasingly deal with families who are unable to meet their healthcare expenses without some form of employer-sponsored assistance. Large insurance companies and a massive bureaucracy have made it extraordinarily difficult for healthcare providers and patients to reach an affordable solution for all parties involved. Since dependents (i.e. workers) do not typically have the means to purchase out-of-pocket healthcare coverage, the Affordable Care Act mandates that employers who opt out of supplying health insurance for their full-time staff must pay a financial penalty.
Put simply, ethical behavior does not always coincide with profitable behavior on an institutional level. While the employer insurance mandate may seem unjust and / or prohibitive to small business owners, its baseline purpose is to function as a means to provide more workers (and worker families) with access to healthcare by penalizing employers who opt out of the initiative. When worker wages are too low to purchase the health insurance coverage their families need, the municipal infrastructure must intervene to provide preventative healthcare services in addition to insurance for pre-existing conditions that may affect the worker’s ability to find employment or improve their education. Whether the employer insurance mandate will serve to incentivize employers toward ethical behavior in insuring their workforce or prompt them to instead shift their workforce toward part-time work remains to be seen.