Most Small Businesses Do Not Understand Requirements Of Health Reform Law


The majority of small businesses either incorrectly believe or are not sure whether they must provide health insurance to employees in 2014, according to the Fall 2012 Small Employer Benefits Survey by eHealth, Inc., the parent company of eHealthInsurance.

Beginning in 2014, the Patient Protection and Affordable Care Act (ACA) requires businesses with the equivalent of 50 or more full-time employees to provide health insurance coverage for their workers. However, 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, one-third (34 percent) incorrectly believed that they were required to buy insurance for employees in 2014, while 35 percent were not sure. Nearly 70 percent either incorrectly believed or were not sure whether they would be required to pay a tax for not providing health insurance in 2014. Only 31 percent of respondents correctly said that the reform law does not require them to a pay tax if they do not offer insurance.

Another part of the ACA not factoring into employers’ strategies is health insurance exchanges. A large majority of small business owners (78 percent) said they were not familiar with health insurance exchanges and how they could impact their business. Government-run exchanges, which are slated to come online by 2014, would make subsidized health insurance available to individuals who do not have access to health insurance through an employer.

The survey also explored employers’ willingness to adopt new cost-saving strategies, as well as their attitudes for imposing penalties related to employees’ participation in wellness programs. To reduce costs, more than half (51 percent) said they would increase employees’ share of premiums. Nearly 40 percent would consider increasing employees’ deductibles. Nearly half of the employers surveyed (44 percent) felt it would be fair to impose penalties on employees who do not participate in wellness programs.

Additional survey results. The survey also found:

• Eighty-three percent of small employers said they review their companies’ health plan benefits once a year.

• More than half of all small employers (59 percent) ask their employees for input when reviewing their company’s health insurance benefits, while 28 percent of employers said they never ask their employees for input.

• Sixty-eight percent of employers said they had no plans to drop coverage for employees in 2014, compared to only 3 percent who did plan to stop offering group health insurance coverage. Nearly a third (29 percent) of employers said they would consider dropping health coverage for employees in 2014.

• Sixty-one percent of small employers are most concerned about the cost and budgetary implications of the ACA.

• One-in-four (25 percent) said understanding the impact on their businesses was their biggest concern.

• The vast majority of small employers (77 percent) said that they were not doing any long-term planning based on their expectations of how health care reform might impact their business.

• A large majority of small business owners (78 percent) said they did not know how health insurance exchanges could impact their business beginning in 2014.

The survey was conducted anonymously online between Aug. 15 and Aug. 22, 2012, and gathered responses from a total of 439 small businesses that had purchased health insurance policies through For more information, visit

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