Just when small business owners (and everyone else) had started to wrap their heads around what the Affordable Care Act meant for their organizations, it seems that we will all be adjusting yet again with Obamacare’s repeal looming largely on the horizon. Whether you love the Affordable Care Act or hate the Affordable Care Act, it is imperative that small businesses start preparing now for what impact the law’s repeal will have on their operations. And while no one knows the exact details of what Obamacare’s repeal will entail, there are some steps and items to be aware of to be primed to make the most of any changes that come our way.
Prepping Your Business for Affordable Care Act Repeal
First of all, there is some significant consensus that rather than being repealed outright, the existing health care law will only have sections repealed while new provisions are added in during a process known as reconciliation. This act will make it easier for Republicans to prevent a filibuster and lower the threshold for votes they need to enact whatever changes to the Affordable Care Act they should decide to pursue. Essentially, look for provisions that are extremely popular (like allowing people to stay on their parents’ health insurance plans until they turn 26) to stay intact as will provisions that do not directly impact the budget (they cannot be repealed via reconciliation and Republicans do not have a filibuster-proof majority).
Budget Reconciliation Process
Next, the annual reporting requirements dictated to businesses by the Affordable Care Act are not likely to go away anytime soon. The budget reconciliation process being undertaken by Republicans can only be used for items that directly affect the budget. So even if the requirement for businesses with more than 50 employees to provide health coverage to employees (the employer mandate) is repealed, the reporting requirement will stay in place. Theoretically, President Trump could issue an executive order to do away with reporting requirements, but it is better to be safe than sorry.
The Cadillac Tax
One aspect of the Affordable Care Act that is very likely to go away is what is known as the Cadillac Tax—a tax that was to be leveraged against high-value health insurance plans (a whopping 40 percent tax for every dollar over a certain threshold) and to become effective in 2020. With 2017 just getting started, the odds of the unpopular provision remaining intact is practically null. It is worth noting that there are some rumblings in the House of Representatives for some other law that would function in a similar way to charge a tax against high-value insurance plans provided to employees, though it is anticipated that the threshold will be much higher and the tax will be a significantly lower percentage.
What this means for business’
Finally, and, perhaps the most well-known section of the Affordable Care Act directly impacting businesses, the mandate that employers provide coverage for full-time employ
If you would like to chat about strategies for adapting to the Affordable Care Act’s repeal, like deciding when and how to provide coverage to employees to the benefit of your business, give us a call. We have helped businesses of all sizes and across many industries that deal with all sorts of accounting and HR challenges.