Obamacare: How business’s costs are affected

There is so much arguing about health reform and how much it will cost everyone.  I don’t really understand it all.  Can you explain to me how Obamacare increases a business’s health insurance costs?

Looking For Straight Scoop

Dear Looking For Straight Scoop,

Health reform might increase a business’s health insurance costs, or it might not.  It depends upon what the business was doing before health reform.

For example, health reform requires businesses to have a waiting period of 90 days or less for new hires to join the plan.  Lots of businesses already had a shorter waiting period; so this wouldn’t affect their costs.  Businesses that had longer waiting periods would have more costs for new hires joining the plan earlier.

Health reform requires businesses to offer coverage to people working 30 hours a week or more.  (Note: this requirement has been delayed until 2016.)  This won’t be a change for some businesses.  For others, it will add people to the company’s plan.

Health benefit plans now have to cover certain services with no co-pay.  This can add to a business’s health insurance costs, if their plan was previously lacking these benefits.

There are dozens of other examples, but you get the pattern.  The greater the gap between their previous plan and health reform minimum standards, the more the cost increase might be.

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Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.