Employers Face Obamacare Deadline

The clock is ticking for Tommy Cain and thousands of other U.S. employers facing deadlines to make changes to the health insurance they offer their employees under the Affordable Care Act.

Mr. Cain has already met one of the law's key requirements: offer health insurance to at least 70% of full-time staffers by 2015, or face penalties.

Tommy Cain in the produce section of one of his Piggly 

Wiggly grocery stores. He faces tough decisions in light 

of the looming deadline. William Widmer for The Wall Street Journal

Back in January, he put a no-frills plan in place for his 250 employees. His Gulf Coast grocery chain offers to pay 60% of premiums costs, deducting $25 weekly from the paychecks of those who opt for the coverage.

But his dilemma now is figuring out whether that plan is affordable to those employees, as required under the law. The cost cannot exceed more than 9.5% of employees' annual salaries, the law says.

With just three months to go before 2015, Mr. Cain is worried that he will be penalized next year if the plan doesn't meet the technical standard.

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As part of its "Faces of the Affordable Care Act" multimedia series, the Journal has been following two small businesses—T. Cain Grocery chain, based in Fairhope, Ala., and Ovenly LLC, a Brooklyn, N.Y., retail and wholesale bakery, to see how they are dealing with the changes they face under the law.

A minority of business owners are considering trimming their head counts below the 50 full-time-worker cutoff or reducing their workers' hours rather than comply with the requirement, which begins in January for companies with 100 or more employees.

Others have run the numbers and concluded that their best financial move is simply to skip the requirement and instead pay penalties, $2,000 for each full-time worker after the first 30.

But most business owners, including Mr. Cain, are expected to comply or already do, consultants say.

Owners should "fish or cut bait," maintains Andy Birol, a small-business consultant in Pittsburgh, Pa. He thinks many owners are spending too much time and money contemplating how to deal with the law when they should be focused on running their business.

"You must make a decision as soon as possible," he says. "The moment of truth is coming right around the corner."Mr. Cain set up a low-cost employee health plan in January at his five Piggly Wiggly grocery stores, which employ 250 people. At that time, his biggest concern was that too many cashiers, deli clerks and other workers would sign up, inflating his costs and forcing him to raise prices.

Like other employers with more than 100 workers, he doesn't have to show that 70% have enrolled in the company's plan. Rather, under the law, he merely must show that he offered the plan to that portion of his workforce and that the option is affordable for them.

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