Insurance considerations in small business formation

So far, companies that employ fewer than 50 people have not had to comply with the federal mandate to provide health insurance for employees. That will change later this year. Going forward, a major consideration in small business formation for Illinois entrepreneurs will be providing health insurance to employees.

Not having to comply with the new healthcare law was supposed to give small businesses time to get their finances in order. For a new business, this will have to be a consideration in the planning phase since the grace period is nearly gone. However, small businesses were not the only ones who needed time to prepare.

The federal government also needed the time to develop an online exchange for small businesses called the Small Business Health Option Program (SHOP). As was the case for consumers, SHOP is designed to give small companies cheaper options than are typically offered in the private market. One of the complaints that companies with fewer than 50 employees had was that the cost of health coverage was unaffordable. SHOP is expected to be up and running in time for the Nov. 15 deadline.

Many existing small businesses in Illinois may be scrambling to determine how they are going to pay for health insurance after the deadline. This is where a new business could have a chance to get ahead of the curve. Making provisions for health care insurance for employees during the planning phase of small business formation will need to be a priority. Remaining in compliance with federal and state laws is an important component of a company's success since owners can spend more time growing the business instead of dealing with governmental oversight.

Source: liveinsurancenews.com, "Health insurance exchange for small businesses is coming", S. Vagus, July 1, 2014

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