It’s officially called the Affordable Care Act, but most business owners know the new health care reform laws better as ObamaCare. There are somewhere in the neighborhood of 30,000 pages of regulations associated with this new statute, and different parts of it are slated to become active every few months through January 1st, 2014, although some provisions of Obamacare have been postponed. Specifically the employer mandate, which requires employers with 50 or more full-time workers to provide qualified, affordable health insurance, will now go into effect in 2015.
Not only will this new law be a bureaucratic nightmare for employers, it could significantly increase the costs of providing health insurance to employees. That’s where a Professional Employer Organization (PEO) can save the day.
ObamaCare comes with a cost, driving insurance premiums up significantly. Not surprisingly, a good deal of companies – particularly small to mid-sized organizations–are looking to spread the cost over a larger pool. Many are joining PEO companies in order to provide a wide range of benefits to their employees while simultaneously outsourcing the regulatory quagmire associated with this new health care reform.
“Partnering with a PEO allows you to take advantage of Fortune 500 benefits,” says Jeff Hecht, President of SourceOne Partners. “You become part of a large group, which means that you get the same cost advantages as larger companies.”
PEO companies help business owners cut costs
The economy could suffer significantly if organizations are motivated NOT to grow. Small business owners could actually resist expanding due to the insurance mandate towards companies of over 50 employees. Basically, any company that surpasses 50 workers is obligated under ObamaCare to pay a penalty unless it offers health care insurance to its staff. Turning over health care management to a PEO service can actually help mitigate the cost of this mandate.
Additionally, any company that has a significant part-time work force – retailers, for example – will have to offer health insurance to any employee who exceeds 30 work hours in one calendar week. It isn’t realistic or a good business practice to keep every employee at 29 hours a week, especially during holiday times when retailers need to boost their manpower.
At the end of the day, it’s all about costs. Tough economic times coupled with massive, unprecedented regulations could spell disaster for the economic recovery. Businesses of all sizes can benefit from partnering with PEOs, especially due to all of the uncertainty surrounding the effects ObamaCare will have on their bottom line.
If you’re a business owner who’s considering a health care solution, please contact us for a free consultation and analysis of your current situation. For brokers and insurance agents that would like to provide PEO services as an option to new or existing clients, please contact us to find out more about becoming a partner. Call 561.674.0748 to speak directly with our PEO experts today.