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In June, the United States Supreme Court, in a 5-4 decision, upheld the Affordable Care Act as constitutional. The law, which was originally passed in 2010, is purported to extend healthcare coverage to millions of Americans and hopefully rein in some of the exponentially increasing healthcare costs. As with many laws, the Affordable Care Act is multi-faceted and contains many aspects which will both directly and indirectly affect the fitness industry. Even before the Supreme Court’s decision, many individuals, business owners, employees, and employers had questions about how they and/or their businesses would be affected by the passage of the new law, some components of which have already been implemented, but that will largely take hold beginning in 2014. The International Health, Racquet, and Sports club Association (IHRSA) initially published an analysis in 2010 when the law was first passed addressing many of these questions; they have recently released an update to that report. Below are some of the more relevant details that affect health clubs, fitness professionals, and businesses.
How the Health clubs May Be Affected
IHRSA outlines 4 major components of the Affordable Care Act that will affect health clubs: 1. premium discounts for employee participation in wellness programs, 2. unlimited reimbursement for health club memberships, 3. annual wellness visits, and 4. greater coverage of preventive services, including obesity counseling. Each of these components seeks to place an even greater emphasis on healthy lifestyle choices. Health clubs stand to benefit from this law in that memberships should theoretically increase as more individuals, who perhaps could not afford a gym membership, will be reimbursed by their insurance provider. The need for fitness professionals, such as personal trainers and registered dietitians, should continue to rise as insurance companies will begin to pay for preventive services such as dietary counseling and regular fitness assessments. Gyms and fitness facilities will most likely need to hire additional staff to accommodate the rise in assessments and counseling.
How All Businesses May Be Affected
Among the many provisions in the Affordable Care Act, IHRSA denotes three in particular that will have an effect on all business: 1. insurance exchanges, 2. tax credits, and 3. potential penalties. Small businesses with less than 100 employees will be able to pool together and purchase more affordable health insurance via state exchanges that will be in place by 2014. Beginning right now, businesses with fewer than 25 full time employees who earn an average of $50,000 or less are eligible for a tax credit of 35% of health insurance costs. The tax credit increases to 50% in 2014. While the first two points appear to be quite beneficial for small business owners and employees, the third (penalties) definitely has the potential to be quite harmful. Beginning in 2014, small businesses with at least 50 full time employees will be subject to a penalty if they do not offer insurance and at least one employee receives a government subsidy, or if the qualifying insurance requires an employee to pay more than 9.5% of household income.
It is important for all individuals, whether employees or employers, to become as informed as possible with regard to the new Affordable Care Act. Whether you agree or disagree with the law set to fully take effect in 2014, there are aspects which are certain to affect you and/or your business. Be careful to fully investigate how your business and how you personally can take advantage of some of the more beneficial components while not subjecting yourself or your business to the more punitive aspects.