Most Small Businesses Don’t Understand Health Reform Requirements

The majority of small business owners don’t know whether they are required to provide health insurance to employees in 2014, according to a recent survey by eHealth. Many small employers have misconceptions about what health care reform requires of them, and few are making any long-term plans based on their expectations of how health care reform might affect their businesses.

Beginning in 2014, the Patient Protection and Affordable Care Act of 2010 (ACA) requires businesses with the equivalent of 50 or more full-time employees to provide health insurance coverage for their workers. Businesses with fewer than 50 employees are exempt from this requirement, although employees may be required to purchase their own coverage.

Based on their size (fewer than 50 employees), only two of the businesses surveyed would be required by the ACA to offer health insurance coverage to employees in 2014. However, 34% believed incorrectly that they were required to buy insurance for employees in 2014 while 35% weren’t sure. Nearly 70% believed incorrectly or were not sure whether they would be required to pay a tax for not providing health insurance in 2014. Only 31% knew that the reform law does not require them to a pay tax if they don’t offer insurance. The survey also revels the following about small employers:

• 83% review company health plan benefits once a year.
• 78% don’t know how health insurance exchanges could affect their business beginning in 2014.
• 77% are not doing any long-term planning based on their expectations of how health care reform might affect their business.
• 68% have no plans to drop coverage for employees in 2014.
• 61% are most concerned about the cost and budgetary implications of health care reform.
• 59% ask their employees for input when reviewing their company’s health insurance benefits.
• 51% would consider increasing an employee’s share of premiums while 39% would consider increasing an employee’s deductible.
• 44% said it would be fair to impose penalties on employees who don’t participate in wellness programs. More than 40% of the employers that are willing to penalize employees consider the following to be acceptable: reduce the contribution to an employee’s health insurance benefits; reduce benefits like dental and vision coverage; and reduce 401k contributions, stock options, or bonuses. For more information, visit

Last Updated 05/25/2022

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