Affordable Care Act Facts for Small Business Owners

Post date: Oct 15, 2013 3:43:37 PM

The following information and links are designed to help small business owners with fewer than 25 employees understand the Affordable Care Act’s (ACA) requirements and their obligations under the law. It is important to note, some requirements may vary from state to state. If you need assistance understanding what your business is required to do under the ACA and state law contact your LegalShield provider law firm.

Requirements - The ACA does not require small businesses to provide health insurance to employees. Fines for employers that choose not to provide coverage or financial assistance for health insurance to full-time employees will only apply to businesses with 50 or more employees and will not begin until 2015. You will need to provide payroll information from each month in 2014 to show that your business had fewer than 50 full time employees.

SHOP - Small Business Health Options Program (SHOP) is a special market place designed to help small business owners access better pricing for insurance. Currently there are limited options available through many of the state SHOP exchanges. To find the options available to you and your employees visit the SHOP marketplace online.

Tax Credits - Small businesses with fewer than 25 employees may be eligible for tax credits totaling up to 50% of their contribution to employee insurance premiums. Visit healthcare.gov to find out if your business qualifies.

Notification - Companies with at least $500,000 in annual business will be required to provide employees with notification on the new health insurance marketplace. These notices were due on October 1st. There is not currently a fine in place for employers who fail to provide the notice. For additional guidelines visit the U.S. Department of Labor website.

Flex Spending - Employee flexible spending account contributions will be limited to $2,500 per year. The limit will be subject to cost of living increases.

Waiting Period - The waiting period for a new employee to receive employer-sponsored health insurance will be capped at 90 days.

Premium Refunds - Under the ACA, insurance companies are required to use at least 80% of premiums towards medical costs. Insurers who fail to meet this ratio will be required to issue a refund. To learn more read the IRS Medical Loss Ratio FAQ.

Resources - To learn more visit the U.S. Small Business Administration website. The SBA offers a wide range of resources, including an Affordable Care Act 101 Webinar that you can register to attend on their website.