Moving into 2018, the Affordable Care Act’s (ACA) future is uncertain in terms of all its provisions. However, some of them apply only to small employers, defined as those with fewer than 50 full-time employees, including full-time equivalent employees.
Small business and the ACA
The Patient Protection and Affordable Care Act, sometimes called ACA, the health care act, or ObamaCare, is a federal statute signed into law in 2010. The Affordable Care Act includes a variety of provisions that reform the insurance market pertaining to small businesses and employee health insurance. A number of changes relating to small businesses are outlined in a document published by the U.S. Department of Health and Human Services. Small business owners with 50 or fewer full-time (or equivalent) employees should be aware of SHOP, the Small Business Health Options Program.
It provides quality health and dental coverage with a tax credit for small businesses that register in SHOP. From January 1, 2018, this registration must be via a private insurance company. Prior to 2018, small business owners were able to shop online for a group plan via Healthcare.gov. While small business owners can still research and compare plans on the government website, they will need to use an agent or broker, or go direct to a provider for their group plan.
The enrollment process for SHOP changed at the start of 2018. Unlike the individual enrollment period for individuals, SHOP enrollment is open year-round. The changes affect plans in effect starting January 1, 2018, or later. To help employees understand the coverage, employers must provide a summary to explain benefits and coverage as well as costs. Employers who offer health insurance to their eligible employees are obligated to offer that coverage within 90 days of the employee’s start date.
Incentives for employers
Incentives up to 30 percent of health care coverage costs are provided by the ACA to assist employers in creating healthy workplaces and wellness programs. Up to 50 percent is provided to support workplace programs that prevent or reduce tobacco use.
Payments and credits
The IRS points out that small employers may be able to put some money in their pockets via tax credits. Small business owners who cover at least 50 percent of the full-time employees’ premium costs, and who have fewer than 25 full-time employees, may be eligible for a Small Business Health Care Tax Credit. More details about the benefit and who may qualify are found on the IRS website.
Reporting by employers
The IRS requires that the following organizations are obliged to report that they provide health coverage:
- Employers with 50 or more FTEs
- Health insurance companies
- Self-insuring employers of any size
This article was written by Laurie Jo Miller Farr for Small Business Pulse