Key Issues Small Businesses Will Face in 2014 - Health-Care Worries

From The Wall Street Journal:

Earlier this year, small-business employers were given a one-year reprieve from the health-care law's employer mandate, which requires businesses with 50 or more full-time equivalent workers to offer health insurance or pay a penalty.

The bad news: Other changes that go into effect next year are likely to boost costs for many of these employers.

Starting in 2014, all Americans will be required to carry health insurance, or face a penalty. As a result, many uninsured workers will likely be prompted to enroll in their employers' plans for the first time, boosting the overall cost of the plans.

Because insurers will no longer be able to set premiums for small-group plans based on industry, or the health or gender of its staff, many are expecting premiums to rise for employers in industries with lots of young, healthy workers. Meanwhile, moderate rate increases are expected for companies with older and sicker employees, and in higher-risk industries.

As a result of technical glitches in the government's online marketplace for coverage, known as the Small Business Health Options Program, or SHOP, small businesses with 50 or fewer workers won't be able to buy plans on the site until November. The one-year delay is significant because the exchanges were meant to attract more participants, boost competition among insurers and lower premiums. However, premiums for small-group plans might not decline as expected.

Another change slated for next year: Insurance companies will be required to pay a new annual fee, which the Congressional Budget Office and insurance-industry experts say will largely be passed on, in the form of higher premiums, to small businesses and consumers who buy their own policies.