How PPACA Will Affect Businesses in 2013



The Patient Protection and Affordable Care Act (PPACA) is, at its core, an attempt to re-establish the insurance premium system established by insurance companies. The primary objective of this law is to provide affordable and quality healthcare to the citizens of the United States. As every law has both negative and positive repercussions on businesses, PPACA too will have a huge impact on the administrative and financial sectors. Business owners, business controllers and financial decision-makers need to be aware of the effect of the law on their businesses.

               PPACA will affect both the small and large business industries. Small businesses will have to pay more for health insurance premiums of their employees. In the current scenario, most of the small business organizations do not give any healthcare insurance to their employees. According to The Commonwealth Fund, only 25 percent of small business employees receive coverage from their company. After the implementation of this law, it has become doubtful that the small business organizations would be able to hire as many employees as the currently do. If these businesses neglect to cover these employees, then they are susceptible hefty fines. Therefore, it can be easily assumed that small businesses may have to reduce their full-time employees or shut down.

               The healthcare reform will affect the large business entities by requiring drastic changes in their existing policies. Large employers need to add new benefits to their existing benefits plan. As per the law, there would also be changes in the administrative system of the larger companies because of new requirements to report information to the government. This information includes complete details about the employer, information about the full-time employees getting the healthcare benefits through an employer-sponsored plan, details of the employer-sponsored plans, the number of full-time employees each month, and W-2 reporting to the IRS.

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