SCOTUS just did you a solid, small-business owners. The Huffington Post writes that on June 25, 2015, the Supreme Court voted to uphold the Affordable Care Act by rejecting the plaintiff's argument in the lawsuit King v. Burwell. The ruling affirms that the aim of the ACA is to improve healthcare markets, not to leave people uninsured, as the lawsuit contended.
The report states that if the Court had sided with the plaintiffs, federal subsidies that make insurance affordable for millions of people would have been wiped out. Some of those subsidies are worth thousands of dollars a year, and nearly 8 million people would be uninsured without these provisions, according to the report.
Needless to say, if you purchase your own coverage through the Obamacare health insurance exchanges, this ruling means your coverage isn't going anywhere. But even if you don't use the ACA exchanges, the ruling still affects your business. Let's explore the implications.
The ACA Ruling and Small Businesses: Keeping Health Plans in Place
First, let's clear this up once and for all: you're not required to buy insurance through the Marketplace (i.e., the Obamacare exchanges). The Marketplace simply makes it easier to buy high-quality health insurance when you aren't insured through an employer or through a spouse's plan.
Because small-business owners are self-employed, they have to purchase their own health insurance if they aren't covered otherwise. If you don't have coverage (but could afford to), you could be fined up to:
- 2 percent of your yearly household income.
- $325 per person (and $162.50 per child) for the year.
You can learn more about that on HealthCare.gov's Fees & Exemptions page.
It may penalize you for not having insurance, but in reality, it's a bad idea not to have insurance anyway, especially given the high cost of simple medical procedures these days and you never know when an accident, injury, or illness may strike. The ACA gives you access to affordable coverage and possibly tax credits that wouldn't otherwise be available.
Your employees benefit from the ACA, too. Granted, the health insurance law doesn't require you to offer your employees health insurance unless you have 50 or more full-time workers (you can learn more about that by reading about the Employer Shared Responsibility provisions). But if your employees suddenly had to pay for their coverage out of pocket with no subsidies to help them cover the cost, they might be more inclined to seek employment from bigger businesses that do offer healthcare benefits.
Final Thoughts on the ACA Ruling
All in all, it's hard to argue that the recent Obamacare ruling isn't a win for small businesses. To sum it up:
- Subsidies will continue, which means people can keep investing in the Marketplace exchanges.
- Without that federal money, many of the people currently insured through ACA plans would have to forgo their coverage.
- A dwindling pool of customers would force insurers to raise premiums, which could put an end to state-run markets as we've known them for the past few years.
Thanks to the SCOTUS ruling, your coverage is safe, and your employees' plans are, too. This allows you to compete with big businesses in other ways if you can't afford to offer your employees health coverage. (However, the ACA does have options if you want to offer that benefit. See the SHOP health plans for more information.)
To learn more about the intersection of the ACA and small businesses, read "Does Obamacare Affect Workers' Comp Requirements?"