Small Employers Struggle to Get a Grip on Obamacare

Andrew Matroni, owner of Queen City Catering in Charlotte, N.C., had no idea whether he’d have to buy a health plan next year for his 15 employees or face fines under the Affordable Care Act. At a March 28 panel hosted by the Charlotte Chamber of Commerce, he was relieved to learn he’s in the clear. “There are a lot of rumors out there,” Matroni says. “The biggest one: All businesses would need to do this or be penalized. I think that’s just a scare for everyone.”

Three years after Obamacare became law and less than nine months before its biggest reforms take effect, many employers still don’t grasp its basic elements. “They’re completely befuddled with who is subject to the penalty and what they’re going to have to pay,” says Craig Hasday, chief operating officer of Frenkel Benefits, a New York City insurance broker. Beginning in 2014, companies that don’t offer insurance face penalties of up to $2,000 per employee. This mandate applies only to businesses with 50 or more people who work upwards of 30 hours a week. That makes 96 percent of employers exempt. Yet a majority of business owners with fewer than 50 workers believe the mandate applies to them, according to a recent survey of 259 companies by online insurance marketplace EHealth.