The Infamous ACA Needs Strategic Tackle

One of the major concerns for American Companies – Small and Medium – is the Affordable Care Act. US Economy website says that, 400% of FPL ($45,960) - pay no more than 9.5% of income (or $4,366). 250% of FPL ($28,725) – pay no more than 8.05% of income (or $2,312). 200% of FPL ($22,980) - pay no more than 6.3% of income (or $1,448). 150% of FPL ($17,235) - pay no more than 4% of income (or $689). 133% of FPL ($15,282) – pay no more than 2% of income (or $306). That's only if you don't qualify for Medicare in your state.

People do not want to spend that much of their hard-earned money on insurance! A leader knows that the PPACA laws is holding their employees back, and therefore needs strategic means that boost their employees’ performance. The best way to understand how to handle this is knowing that all companies have micro-employees, and teams are combinations of them. Let’s say your company has 5 people making $45,960 each per year. These people pay $21,830 for insurance.

10 people who are making $28,725 each will pay $23,120 for insurance. 20 people making $22,980 each will pay the total sum of $28,960 for insurance. 10 people who are making $17,235 each will pay $6,890 for insurance. 5 people who are making $15,282 each pay the total sum of $1,530 for insurance. These 50 employees pay the total sum of $82,330 per year for insurance. That is a lot of money to pay annually, especially when employees are not interested in PPACA. Many people find insurance expensive.

For your business to survive the PPACA and still gets ROI, ask how? The company needs to know how much insurance cost for 50 employees. Let’s use $82,330 to implement a possible strategy. Assuming the company is making 1,800,000 dollars before these 50 employees were recruited. When they were recruited, its income increased by $600,000, and now making $2,400,000. It increased its expenses with $82,330 for employees insurance.

Now, let’s do two things. The first is to know how much they are willing to spend on the insurance. Let’s say $15,000 without problems. The second thing is getting $82,330. The company sells its products $22 each. It sells 109091 products every year to make $2,400,000. The next step is adding $82,330 to $2,400,000, which result in $2,482,330. Then it increase the price of each product to $22.76.

With the new price, the question is, will your customers or clients pay 76 cents extra for your products? If the answer is yes, then that is the solution. If it’s no, then add value to your company. The next question is, how will the company sell to employees? The answer is simple, legal and ethical, because the employer can state that it is paying for the employees’ insurance. It is understandable that when revenue increases, so does taxes.

However, this is the reason we discussed $15,000 earlier. When the expenses increase, use that $15,000 to pay tax. And, by the end of the year, company gets tax deduction from purchased services, materials and tools. This makes it possible for the company to make extra money. How the company gives it to its employees depends on the employer, but at least now, the insurance expenses have been funded. Customers are buying your products. It is easier for employers and employees to have high performance in their businesses.