Small Businesses' Decisions to Offer Health Insurance to Employees

Three briefs from Mathematica Policy Research use a survey of small businesses to provide insight on early and likely effects of the Affordable Care Act on small businesses.

Small Businesses' Decisions to Offer Health Insurance to Employees

The ACA exempts businesses with 50 or fewer full-time-equivalent (FTE) employees from the employer mandate, and those with 50 to 99 FTEs are exempt until 2016. Nonetheless, several provisions in the ACA, such as the small business tax credit and the Small Business Health Options Program (SHOP), may reduce small business premiums and prompt these employers to offer insurance despite the exemption. 

Small Businesses and Health Reform

Several ACA provisions are designed to help small businesses offer health insurance to their employees, often by directly or indirectly reducing the costs of providing coverage. However, many small businesses are not aware of these provisions, highlighting the importance of raising awareness of the potential benefits of health reform.

What Kinds of Health Insurance Do Small Businesses Offer?

The future effects of the ACA on the insurance offerings of small businesses are unclear. The small businesses that continue to offer coverage will face changes in what plans are available to offer. As individual and Small Business Health Options Program (SHOP) exchanges are developed, employees of small businesses will likely receive more choices and more comprehensive coverage, possibly at more competitive prices.