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Impact of Obamacare on Small Businesses

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Several Key Points You Need to Know about ObamaCare

Now that ObamaCare is officially up and running throughout the country, there are still millions of employees, employers and business owners that are still a little confused as to what this particular policy means for them. Therefore, here are a few quick areas to consider in order to learn more about this system.

What is it?

Even though it is clear who it is named after, one of the most resonating questions that seem to be unanswered and misunderstood by many is what it actually is as well as what it requires. ObamaCare basically consists of two factors – the Healthcare and Education Reconciliation Act of 2010 as well as the Patient Protection and Affordable Care Act. The target objective was to focus on making all health insurance companies accountable while decreasing healthcare costs, expanding coverage and increasing the overall quality of the care that is being offered to all Americans.

Understanding the 80/20 Principle

One of the most confusing factors of ObamaCare is the 80/20 principle that serves as one of the core elements of this plan overall. Based on the restrictions outlined within this law, insurers are required to spend a minimum of 80 percent of their money on healthcare and just 20 percent on other overhead expenses.

Based on the rules and regulations of the ObamaCare plan, any company that decides to exceed that 20 percent threshold when it comes to paying other overhead expenses are required to mail out rebate checks directly to their clients. Even though this might not seem like a very big deal, over $500 million in rebates were sent to clients in 2012 alone.

Benefits Experienced by the Average Consumer

For obvious reasons, the ObamaCare plan has clearly not been such a big hit when it comes to business owners and upper level management – especially they are forced to invest a considerable amount of their revenue each year to healthcare. However, the benefits and advantages for the average consumer are mostly heading in an upwards direction. For instance, it is actually estimated that even companies will be able to save a substantial amount of money by using this plan in the long run – one study shows up to $2,000 per employee. However, the general public will just have to wait and see what the future holds in order to fully identify whether or not the ObamaCare will pay off.

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