ACA Insurance

A Case Study on Affordable Care Act (ACA) Insurance
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Abstract
William runs a small business with only nine employees. The law does not require such small businesses to offer employees a health insurance coverage. However, William chooses to provide his workers this benefit plan to promote their welfare, increase productivity and reduce employee turnover rate. William is unable to decide on a health insurance cover that is both affordable and comprehensive and is left with the choice of ending the program, passing the cost to the workers, opting for a bare-bones catastrophic plan or lowering the wages of employees. All these options are both advantageous and disadvantageous to the employer and employees. However, William can choose to reduce salaries and other benefits to cover the rising health insurance costs. Opting for SHOP Marketplace will then be easy for the company since it allows both small business employers and employees to choose the most suitable health insurance plan. This approach will ensure William is eligible for tax credits. It will also help the small business to retain and recruit employees who are comfortable with the plan, thus, reducing employee turnover rate.

A Case Study on Affordable Care Act (ACA) Insurance
Introduction
ACA, also known as Obamacare, is the current law in the United States that governs and protect access to health care for the public. ACA is primarily responsible for the provision of quality and affordable health insurance coverage to a majority of American citizens.

Unlike the Medicaid program, ACA ensures that almost all individuals have access to medical services in the US. This new insurance market regulation prevented insurers from charging individuals a lot of money depending on their income. It also prevented the insurers from denying health insurance coverage to any American citizen (Maxwell, 2012). The case of William explains the numerous challenges employers undergo in an attempt to ensure that all their employees receive comprehensive health coverage regardless of the severity of their health status.
William’s employee is diagnosed with cancer which leads to the doubling of the company’s group premium by the insurers. He is then faced with the options of terminating the health insurance plan, offering a bare-bones catastrophic plan or lowering the workers’ wages to cater for their medical services or provide a comprehensive healthcare plan but pass the extra charges to the employees. William can choose any of the options mentioned above because they are feasible. Nevertheless, the choice taken will have different impacts on the employees and the employer.
The Pros and Cons of different William’s Decision on Health Insurance Cover
The first option for William is to terminate the health insurance coverage plan. This decision does not violate ACA provisions since it is not mandatory for employers with less than 50 employees to insure their workers (Maxwell, 2012). Ending the health insurance coverage for employees will also reduce the company’s expenses given the fact that the cost of healthcare services is on the rise. Nevertheless, terminating the plan can cause high employee turnover especially if William’s business is in a competitive market. Employees may choose to work for other companies that cover their healthcare needs. This option, therefore, is ineffective for William.
Secondly, William can decide to offer a comprehensive health insurance cover but pass the cost to his workers. This option is beneficial to the company since it will not spend a lot of resources to support employees’ medical expenses. It can, therefore, use the resources to accomplish other interest-earning activities or expand on other employees’ benefits programs. However, employers will be adversely affected since they will have to spend a lot of money to get health services. For this reason, some of the employees may choose to seek employment in companies that offer health insurance coverage. Additionally, it will be increasingly difficult for William to recruit new employees due to an expensive healthcare plan.
The third option is for William is to offer a bare-bones catastrophic plan. This program ensures that employees receive comprehensive medical cover only when their health status is critical. For instance, an employee who gets a heart attack, cancer or a head injury at work qualifies for this plan. The advantage of this type of cover is that many young employees qualify for it. ACA mandates health insurers to cover people below the age of 30 with this plan (Maxwell, 2012). Additionally, it allows employees to seek screening services thrice a year. However, the bare-bones catastrophic plan is not very appealing to people over the age of 30 because they are not covered.
The last option for William is to significantly lower wages and other benefits to curb the rising health insurance costs. This option is useful because employees will be guaranteed of a comprehensive healthcare cover despite a reduction in their wages. Thus, employee turnover will be minimal. Additionally, William will not incur any other expenses which may be inconveniencing to either the employees or the company. However, it is likely that some employees may opt to seek employment elsewhere due to low wages.
The option of offering comprehensive health insurance cover but passing the cost to employees will put William in a non-compliance status of the ACA provisions. This option will violate ACA provision which mandates employers should not deduct more than 10% of employees’ household income towards the cost of a health insurance plan (Maxwell, 2012). Thus, William should ensure that he does not violate any of the ACA provisions to avoid legal charges.
Thus, the best option for William is to lower wages and other benefits to cover for rising health insurance costs. This choice will allow him to afford SHOP Marketplace, federally-run exchanges involved in selling health insurance policies for a small group. It is suitable for employers with less than 50 employers since it gives both parties the opportunity to select the best plan through the employer, hybrid or employee choices (Gabel, Stromberg, Green, Lischko & Whitmore, 2015). Notably, SHOP marketplace will allow William to receive tax credits.
Conclusion
William offers a health insurance coverage to his employees to promote their wellbeing, boost productivity and minimize labor turn over. However, he is unable to find a suitable coverage because the insurance companies available in the market are expensive. Choosing a costly plan may cause employee turnover, push away new employees or cost the company. However, the best option for William is to significantly lower wages and other benefits to cover the rising health insurance costs. This option may cause some employees to look for a job in better places, but the company can be in a position to retain or recruit other employees who are comfortable with the new wages.

References
Gabel, J. R., Stromberg, S. T., Green, M., Lischko, A., & Whitmore, H. (2015). An early look at SHOP marketplaces: Low premiums, adequate plan choice in many, but not all, states. Health Affairs, 34(5), 732-740,1-6. http://dx.doi.org/10.1377/hlthaff.2014.1370
Maxwell, N. L. (2012). The health and wealth of a nation: Employer-based health insurance and the Affordable Care Act. WE Upjohn Institute.