by Rick Lindquist, co-author of “The End of Employer-Provided Health Insurance: Why It’s Good for You and Your Company“
The Affordable Care Act (ACA) is inspiring innovation. By making individual health insurance accessible and affordable, it has knocked down one of the greatest barriers to entrepreneurship. Budding entrepreneurs no longer need to worry about where they are going to get health insurance — or how they’re going to offer it to the talented people who can help them get their startup off the ground.
Over the next 10 years, 100 million Americans will buy individual health insurance, and many of those will be entrepreneurs and small business owners. Today, because of Obamacare, it’s easier and cheaper for individuals to buy health insurance. As a result, entrepreneurs have the opportunity to pursue the American Dream of owning their own business without the worry of where they are going to get health insurance.
It also allows entrepreneurs to offer health benefits to employees that they might otherwise have foregone. Rather than pay for an expensive group policy, they can offer a stipend to employees to buy the health insurance that best suits them in the Marketplace — insurance that is significantly less expensive and more flexible. It is a win-win.
Here are three key reasons why the Affordable Care Act is great for entrepreneurs.
1. Would-be entrepreneurs can finally follow their dreams.
Millions of Americans today are trapped — either unable to retire early, in jobs they don’t really want, or in jobs that don’t actualize their full potential — all because they need their employer-provided health insurance.
Many potential entrepreneurs believe that employer-provided health insurance is a reason to stay in their current job. This is no longer the case. Whether you have a preexisting condition or dependents who need the coverage, now you can find a plan that matches your budget and medical needs in the Marketplace. You can quit your job, start your business, and still have the peace of mind that comes with having dependable health insurance.
2. Small businesses and startups can attract talent.
For years, health benefits have served as important recruiting and retention tools for companies that offer group health plans. It was often the case that small businesses and startups were less competitive in their ability to offer similar health benefits. But the Affordable Care Act changes that. Before, they couldn’t compete against health benefits packages of large companies. But now entrepreneurs can offer to reimburse the cost of the health insurance that their employees have purchased in the Marketplace.
3. It frees up time and resources that can be used to get a business off the ground.
The time and money business owners spend managing traditional employer-provided health insurance are time and money that aren’t spent on managing, improving, and marketing the company. Now, entrepreneurs can simply implement a defined contribution program and give employees a stipend to use toward purchasing and paying for their own health coverage. Once the system is set up, entrepreneurs are free to focus on what really matters — growing their business.
In lots of ways, the Affordable Care Act evens the playing field for entrepreneurs and small businesses. Now, entrepreneurs can offer health benefits programs that compete with employee benefits offered by larger, more established businesses.”
Rick Lindquist is president of Zane Benefits, Inc., the U.S. leader in individual health insurance reimbursement for small businesses. He is coauthor of “The End of Employer-Provided Health Insurance: Why It’s Good for You and Your Company“.