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ACA impact on small business employers

September 12, 2012

By Craig Palmer, ADA News staff

Washington—An Association member asked the ADA News for information “about the effect the Affordable Care Act will have on dental practices.

“I’ve read where businesses with more than 50 employees will have to provide medical insurance, but that doesn’t apply to the majority of dental practices of which I’m aware,” the doctor said. “Assuming there is not a change in administration next year, what exactly are small dental practices looking at in the way of what we must provide to our staff, both full and part time, as employers? With the economy the way it is, any change in overhead could impact the business side of what we provide to the public.”

Several provisions of the ACA may have effects on small businesses, their employees and families, the Henry J. Kaiser Family Foundation said in a report explaining health care reform (PDF).

The ADA Washington Office offered additional information on two potential ACA effects on small business employers.

• The ACA does not require small businesses with 50 or fewer employees to provide health insurance. Most dental practices have 50 or fewer employees. If the small business employer chooses to provide coverage for employees, qualifying employers with fewer than 25 employees and average annual wages of less than $50,000 will be eligible for tax credits (which disappear after 2016), on a sliding scale, to assist the purchase of health insurance coverage. According to the 2007 economic census there were 206 dental establishments with 50 or more employees, or 0.2 percent of the total dental establishments, ADA’s Health Policy Resources Center said. By another measure, the economic census defines a firm as a business entity consisting of one establishment or more under common ownership or control. There were 363 dental firms with 50 or more employees in 2007, or 0.3 percent of total dental firms.

• The Association continues to support repeal of ACA provisions that are not consistent with Association policy, such as the 2.3 percent medical device excise tax scheduled to take effect Jan. 1, 2013. The Association and members of the Organized Dentistry Coalition have opposed implementation of the device tax, and the House of Representatives passed a bill in June to eliminate the tax. The legislation is stalled in the Senate. The coalition estimates that the tax will increase the cost of dental care by more than $160 million annually. The IRS has yet to issue final regulations.

The 2011 ADA House of Delegates called for a study of the impact of the Affordable Care Act and the impact of projected marketplace changes on the dental profession. The ADA News will offer continuing coverage of ACA implementation.