Affordable Care Act: Employer Mandate explained

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GRAYSON CO, TX-The national park closures, the federal worker furloughs, all part of Congress's failure to pass a budget. The main reason for disagreement, the Affordable Care Act.

One local business owner said the new law will cost him at least half a million dollars more each year since it requires him to provide health insurance for his employees. But experts said not all businesses will be affected the same way.

The employer mandate part of the Affordable Care Act requires businesses to provide health insurance for their employees. It's divided into four categories. Wednesday we sat down with experts who explain what each category requires of business owners and a business owner who tells us how the new law will affect his company.

Douglass Distributing's Bill Douglass said the employer mandate of the Affordable Care Act could be a high price to pay for his business.

"Well Obamacare has been expensive from a standpoint of expense. It's the biggest expense we've ever incurred in the company," he said.

Douglas said they currently spend $700,000 a year for employee health coverage, but the new law will require him to pay $500,000 more--a grand total of $1.2 million a year for health insurance alone.

Small Business Development Center's Dr. Karen Stidham said area small businesses are worried the new law will be a financial burden.

"Small businesses who are providing any healthcare now, it may increase their cost. But there may be an offsetting tax credit, not completely equivalent to the cost, but it could provide some help there," she said.

Stidham said the Affordable Care Act divides businesses into four categories: self-employed, under 25 employees, up to 50 employees and more than 50 employees. She said all are required to provide health insurance.

"They're all are going to have to find some means of providing healthcare or an alternate means for those employees to secure healthcare. For those self employed, they will as an individual be seeking insurance," she said.

If you have 50 employees or fewer, you are required to inform your employees about their health insurance options. For example, choosing to take part in the coverage provided by the company or choosing their own plan through the health insurance exchange. Business owners can compare group insurance plans as provided in the exchange before choosing the plan they'll offer employees.
These businesses are also eligible for tax credit.

For busineses with more than 50 employees, the same requirements apply. But if you don't provide insurance for employees by 2015, you could be fined $2,000 per employee per year.

Tamra Bragg is one of Douglass Distributing's 300 employees.

"We had to decide if to pay or to play. And we agreed as a company that we would continue to provide healthcare for our employees and we would do what is necessary to provide funding for that," she said.

"It may mean restructuring some things within the business, but I think there are options. We are seeing people, seeing some of our business people who are reducing hours so they don't have as many full time employees," said Stidham.

And Bragg said they've already started to do that.

"We no longer hire full time employees, so my workload has doubled because I'm hiring twice as many people because if I had a store with an opening for one person. I'm now replacing that one full timer with two part timers," she said.

If you have more questions on the Affordable Care Act's employer mandate, the Small Business Development Center at Grayson College will hold a free class on the 26th.

The deadline for insurance open enrollment is March 31st, 2014.

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