‍Although Obamacare has received mixed reviews, it’s clear that it has a significant impact on small business owners and their employees.

The Patient Protection and Affordable Care Act (ACA), referred to as the Affordable Care Act or “ACA” for short, was signed into law by President Barack Obama in March of 2010 and aims to extend insurance coverage to uninsured Americans and to slow the increasing costs of healthcare. 

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What Small Business Owners Need to Know About the Changes Ahead

Although Obamacare has received mixed reviews, it's clear that it has a significant impact on small business owners and their employees. With recent legislative developments and upcoming changes to key subsidies, there's never been a more important time to understand how these shifts could affect your business and your team.

The Patient Protection and Affordable Care Act (ACA), referred to as the Affordable Care Act or "ACA" for short, was signed into law by President Barack Obama in March of 2010 and aims to extend insurance coverage to uninsured Americans and to slow the increasing costs of healthcare.

The Affordable Care Act: A Continuing Evolution

"Obamacare," as it's most often referred to, is the most controversial and far-reaching healthcare legislation in decades. The law was designed to increase access to affordable health insurance, but it also has a number of provisions that affect small businesses. As a business owner, you need to be aware of how current developments and potential changes to Obamacare will impact your company.

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What's Coming: The Subsidy Cliff and Congressional Action

Here's what every small business owner needs to understand about the significant changes on the horizon:

The Expiring Enhanced Subsidies

Enhanced premium subsidies were first made available under the American Rescue Plan Act and extended until the end of 2025 under the Inflation Reduction Act. These enhanced subsidies have been a lifeline for millions of Americans, including many of your employees.

In 2021, Congress passed the American Rescue Plan Act (ARPA), essentially helping those with lower incomes become eligible for health credits to reduce the cost of their insurance premiums. Combined with the Affordable Care Act guidelines, this ARPA passing allowed another 16 million Americans to be eligible for tax credits.

The reality check: This rescue plan is set to expire at the end of 2025, meaning millions of American households will lose their tax credits and no longer qualify for extra assistance with health benefits found on the Marketplace.

According to the Center on Budget and Policy Priorities, more than 90% of those who buy insurance on The Exchange rely on these tax credits to have affordable health premiums. Without these tax credits, millions of households will lose their insurance coverage entirely.

The Numbers That Matter to Your Business

Let's look at the real impact: In 2024, Americans buying insurance from the Marketplace hit an all-time high, reaching over 21 million households nationwide. When the subsidies expire, the Congressional Budget Office projects that marketplace enrollment would drop from an estimated 22.8 million in 2025 to 18.9 million in 2026.

For those receiving the enhanced subsidies, it's estimated their annual premium payments went down by about $700. If and when these tax credits expire, each state will see a different effect on their premiums, but some states are expected to see as much as a 75% increase in premium payments, leaving millions of Americans uninsured.

Real-world example: What does this look like for an average family of 4 earning just over $120,000 a year? It means on average their monthly premiums would increase by about $2,000, adding an additional $24,000 in premium costs each plan year. This means the family would go from paying roughly $10,000 a year for health insurance to roughly over $34,000 a year without the subsidies.

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The "One Big Beautiful Bill" and What It Will Mean

Adding to the upheaval this bill will cause is the current legislative discussion around what's being called "the One Big Beautiful Bill," which includes a substantial rollback of the Affordable Care Act.

The changes that will take place because of this bill will affect more than 10 million people who were automatically enrolled in their coverage for the 2025 plan year. The new bill eliminates the automatic re-enrollment process and instead requires participants to follow an annual reverification of their tax credit eligibility. 

In addition all ACA marketplace policy holders will be required to update and confirm their income, immigration status, and other important information before being able to enroll in benefits. 

According to KFF analysis, the bill—along with additional administration health changes—will  strip nearly 17 million Americans of health insurance coverage by 2034. The changes estimated in this bill will also cut more than $1 trillion from Medicaid, Medicare and the Affordable Care Act. 

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Current ACA Requirements: What Hasn't Changed (Yet)

While we navigate these potential changes, the current ACA mandates remain in effect:

ACA Mandates for Employers

The Affordable Care Act mandates that all businesses with 50 or more full-time or full-time equivalent (FTE) employees must provide health insurance for their employees. If a company fails to do so, they are subject to penalties.

Businesses with 1-49 full-time employees are not subject to this requirement. However, due to the expensive nature of individual healthcare products from the marketplace, small businesses need solutions to help employees navigate these changing waters.

Employer Responsibilities

Employer responsibilities under the Affordable Care Act include offering affordable, comprehensive health coverage to at least 95% of their full-time employees. Health coverage is considered "affordable" if the employee contribution for premiums is no more than 9.12% of household income in 2023 for employee-only coverage. It is "comprehensive" if it provides a minimum value of at least 60% of the total allowed cost of benefits provided by a typical employer plan and includes substantial coverage of physician and inpatient hospital services.

Updated Open Enrollment Period – Don’t Miss This Big Change

There's one immediate change that affects 2025: The ACA has modified the open enrollment period, which previously ended in mid-January, will now be ending on December 15th for the first time in several years. This shortened timeline means employees have less time to make crucial healthcare decisions.

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Federal Eligibility and Individual Enrollment Requirements

There are three key federal requirements for ACA Eligibility that apply in all 50 U.S. States:

• Individuals must be either U.S. citizens, U.S. nationals, or non-citizens who are lawfully present in the U.S. for the entire time they plan to have health coverage
• Individuals must not be currently incarcerated
• Individuals must live in the United States and meet state-specific residency requirements for the marketplace where they wish to obtain coverage

When an employee enrolls for a healthcare plan through the marketplace, they may be eligible to receive an advanced premium tax credit to help offset the cost of their monthly healthcare premiums. However, the current tax credits will look very different come 2026. 

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Insurance Market Standards: The Silver Lining

One positive aspect that has remained consistent is the insurance market standards that the ACA sets. Before the ACA, insurance companies were able to discriminate against people with pre-existing conditions and charge women higher rates than men. The ACA outlaws these practices and requires insurers to provide coverage to everyone, regardless of their health status or gender. This has made it easier for small business owners to get health insurance for themselves and their employees.

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Coverage Tiers and Benefits

The Affordable Care Act standardized small-group and individual health insurance plans by creating a colored "metal" ranking system with bronze, silver, and gold tiers based on actuarial value.

The law requires that all plans offer a minimum level of coverage starting with the bronze tier, which covers 60 percent of an individual's medical costs. Silver and gold-tiered plans cover 70 and 80 percent of medical costs, respectively.

Besides ACA products, other health coverage options include health savings accounts (HSA), High-Deductible Health Plans (HDHPs), Health Sharing Ministry Plans, Primary Care Memberships, and Private, Non-Marketplace Plans.

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Penalties for Noncompliance: The Stakes Remain High

If a business with 50 or more full-time employees fails to meet the ACA's minimum requirements for providing health insurance to staff, penalties may be levied. If you’re thinking about offering benefits because you’re approaching this phase of growth, check out the guidelines laid out in Implementing Benefits for 50+ more Employees. 

Regardless if you employ contractors, part-timers, or full-time W2 employees, if you meet the requirements with 50 or more FTE employees and you don’t offer coverage to at least 95% of FTE employees, the potential penalty is $2,970 per full-time employee in 2025 (adjusted for inflation from the original $2,000). The first 30 employees are excluded from the calculation.

For example, if an employer has 65 FTE employees, doesn't offer any health coverage, and at least one employee gets coverage in the exchange and qualifies for a premium subsidy, the employer would owe a $101,500 penalty for 2025. The calculation is: (65-30) x $2,970 = $103,950. While this may seem overwhelming and complex to calculate, tools like the ACAWise ALE calculator make it more manageable. 

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How to Navigate This Uncertain Landscape

As small business owners, we never expect to be faced with the number of challenges that can arise when managing a business. We want the freedom to build something great, but administrating and navigating healthcare in this uncertain environment has made that unnecessarily difficult.

The reality is that the Affordable Care Act is currently law, but significant changes are coming in the next few months. You can get a broker to help you implement and manage healthcare for your workers, or you can explore alternative solutions that provide stability during these uncertain times.

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Your Health Insurance Alternative: A Stable Solution

The continued rising cost of healthcare—potentially accelerated by the expiration of enhanced subsidies—has made it difficult for small and medium-sized businesses to operate and provide healthcare benefits. Many US-based employers are now exploring low cost healthcare options that meet minimum essential care requirements as a way to reduce expenses while still supporting their employees' needs.

At Meridio, we understand the challenges you're facing. We offer a solution to the rising healthcare costs by providing small businesses with affordable, ACA-compliant, transparent coverage plans. No minimums. No red tape. Our guaranteed acceptance plans come with licensed Benefits Guides and a Customer Care team available to assist with education, enrollment, and on-going management of your account to support your business and team needs.  

We remove the administrative burden so that companies can offer quality healthcare without inconvenience or a lengthy implementation process—especially important as the regulatory landscape continues to evolve.

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What You Can Do Today

1. Stay informed about the legislative changes and their potential impact on your business and employees
2. Review your current coverage and assess how potential subsidy changes might affect your team
3. Consider alternative coverage options that provide stability regardless of legislative changes
4. Plan for the shortened open enrollment period ending December 31st 
5. Use available calculators to estimate how your family or employees might be affected by subsidy changes

The healthcare landscape is changing rapidly, but you don't have to navigate it alone. We're here to help you understand your options and find solutions that work for your business, regardless of what changes lie ahead.

For more information about how Meridio can help your business maintain stable, affordable healthcare coverage, contact us today. 

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