The reason: existing policies do not offer what is required under the Affordable Care Act, which takes effect Jan. 1. Most of the cancelled policies were sold after the law passed in March 2010. Some are reportedly cancelling plans sold to people with pre-existing medical conditions.

In a blog post, the SBA gives this fact: If your company is covered by the Fair Labor Standards Act, you must provide a written notice to your employees about the Health Insurance Marketplace by October 1, 2013. However, there is no fine or penalty under the law for failing to provide the notice.