While the Patient Protection and Affordable Care Act may prevent most business owners from being required to provide their workers with employee benefits until 2016, entrepreneurs have done the math on how much the mandate will cost them. The results aren't pretty.
On average, the ACA has the potential to cost business owners between $4,800 and $5,900 for every employee they have on staff, according to a new survey performed by the American Health Policy Institute.
In order to arrive at these findings, AHPI queried 100 companies, all of which employed at least 10,000 people. Based on their figures, benefit expenses could swell between $163 million and $200 million in 2016, the first year in which the employer provision will be enforced, the Washington Free Beacon reported.
"This study is a c-suite diagnosis of how the ACA is shaping large employer behavior," said Tevi Troy, AHPI president. "We don't know yet precisely how employers will react, but the study shows that employers will have to make real changes or incur heavy costs, which means that the ACA will have a significant impact on those in employer-sponsored health care."
The report added that based on the anticipated costs that many business owners are expecting, they'll likely have an incentive to change their employer-sponsored policies in an effort to offset rising operational expense issues.
Some have suggested that the unintended consequences of the ACA could wind up affecting the unemployment rate, as some companies may decide to reduce the number of hours for workers as a means of avoiding the employer mandate. The health reform law does not require large employers to provide health benefits to part-time workers, or those who work less than 30 hours per week.
BenefitsPro reported that employers may also be adversely affected by the so-called "Cadillac" tax. This is issued for companies whose plans exceed $10,200 in annual premiums for individuals and $27,500 for a family of four.
