Since the laws don’t start taking effect until 2014, we still have a while to wait to see how they will really affect us. Whether we own a small business or just work for one, there are some features of the new legislation that we can be sure will affect us, but much of it is still a mystery, and there are still three and a half years for lawmakers to make revisions to the bills before they take effect.

As it stands now, here are some of the likely effects (benefits and liabilities) for small businesses:

• All Americans will be required by law to have insurance. Of course, this means you. It also means your employees. So, if you don’t insure them, they will need to find private insurance. Some employees might simply look for other employment rather than paying premiums, so be sure to take that into consideration when you make decisions regarding employees’ medical insurance.

• Small companies will be able to band together to purchase insurance at lower rates normally reserved for larger groups. Each state is required to make provisions for smaller companies to do this. These Small Business Health Options Programs (known as SHOP exchanges) will be available to companies with 50 or fewer employees, and in some cases to companies with up to 100 employees.

• Part of the costs of providing medical insurance will be defrayed by the government. At present, it looks like 35% of the costs will be covered for the first two years. While it still might be cheaper to pay the $750 per employee fine, the government picking up more than a third of the insurance tab will lower the cost of insuring your employees significantly.

• If you have fewer than 50 employees, you most likely won’t be directly affected or required to provide insurance. As previously noted, though, even if you’re not required to provide it, your employees are going to be required to have it, and in many cases, it will be easier to get a different job with medical insurance than to buy it for themselves.

Small business owners should be watching this closely, both the good and bad parts of it. There is still time to contact your congressman if you have any concerns or suggestions. Health care in this country is going to change, but you can have a voice in molding what that looks like.

Photo via reynolds.james.e

Here are some of the options available for small businesses to get some medical insurance coverage:

Group Purchasing Agreements (GPAs)

Group Purchasing Agreements help small businesses get access to medical insurance by grouping multiple small businesses together to represent the same buying power of a much larger company. Several states have mandated that GPAs be available. These states include Arkansas, Kansas, Montana, New York, New Mexico, Ohio, Texas and Wisconsin.

Even in states without mandated GPAs, you may be able to find an association of small businesses, such as a local Chamber of Commerce, that has established a GPA.

High Risk Medical Pools

Some states have what are known as “High Risk Medical Pools.” These are medical pools that guarantee coverage to folks who can’t get medical coverage through another source, usually because of a preexisting medical condition. These pools guarantee major medical insurance for a price. Only a few states don’t have these pools, including Arizona, District of Columbia, Georgia, Massachusetts, Michigan, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Virginia. In other states, the state insurance commission can provide information about the high risk medical pool in that state.

Reinsurance

Reinsurance is a state-run program that subsidizes medical insurance. States may offer medical insurance to small business owners and employees, as well as people below a certain income line. In other cases, a state may offer a purchasing pool. Sometimes the cost of the program is put off on a third party, such as a reinsurance carrier, a reinsurance pool, or the state itself. Several states provide reinsurance policies, including Arizona, Connecticut, Idaho, Massachusetts, New Hampshire, New Mexico and New York.

While medical insurance options for small businesses may be more costly than medical insurance policies through a corporation, in today’s environment you can’t afford to be caught without some form or another of medical insurance. Check with your state and with your local business groups to see what kinds of options may be available to you today.