10 things every small business should know about the Affordable Care Act
Navigating the ins and outs of the new health care laws can be tricky, especially with some states offering different plans.
Thu, Oct 03 2013 at 10:52 AM
After months and months of debate, health care reform was ushered in this week. While coverage under the Affordable Care Act will not kick in until the first of the year, starting this week small businesses and individuals can start enrolling through the federal government's new Health Insurance Marketplace. Included in that is the Small Business Health Options Program (SHOP) for small businesses with fewer than 50 employees.
Here are 10 things small business owners need to know about the new SHOP Marketplace and how it is affecting them.
The Small Business Health Options Program is now open
This week, the SHOP Marketplace was officially opened for small businesses with fewer than 50 employees. The SHOP Marketplace is a new program under the Affordable Care Act that is designed to simplify the process of buying health insurance for small businesses. The SHOP Marketplace offers businesses options for controlling the coverage they offer and the premiums they pay for each employee. The Marketplace also allows small businesses to compare and contrast SHOP plans with privately offered plans to ensure they are getting coverage that is most cost-effective for them and their employees.
Businesses with fewer than 50 employees are not required by the new Affordable Care Act to provide insurance to their employees
While the SHOP marketplace offers small businesses a chance to find coverage, they are under no obligation to do so. Obamacare includes no penalties for businesses with under 50 employees that choose not to offer health insurance to their employees. Starting next year, however, businesses with more than 50 full-time employees that do not provide coverage to their full-time employees may be subject to fines. According to the Small Business Administration, however, 96 percent of America’s businesses are too small to be subject to these rules.
Small businesses are only eligible to obtain coverage via the SHOP Marketplace if they offer insurance coverage to every employee
In order to qualify for insurance from the SHOP Marketplace, small businesses cannot pick and choose which employees to offer it to. Small businesses with fewer than 50 employees must offer SHOP coverage to all of their full-time employees, as well as those that work more than 30 hours a week, in order to obtain coverage.
Each state is offering different plans and coverage
While the SHOP Marketplace is a nationwide program, it is being operated differently in each state. Each state will either have its own Marketplace, partner with the U.S. Department of Health and Human Services (HHS) to partially run the Marketplace, or have a Marketplace run strictly by the HHS. The Small Business Administration reports that 17 states and the District of Columbia are establishing their own Marketplace, with several others partnering with the HHS.
Larger businesses will eventually gain access to the SHOP Marketplace
While the SHOP Marketplace is currently only available to businesses with fewer than 50 employees, larger companies will be able to access it in the years ahead. Starting in 2016, SHOP Marketplaces in each state will be open to businesses with fewer than 100 employees.
Small businesses with fewer than 25 employees may qualify for a tax credit to offset the costs
Small businesses that opt for coverage for their employees through the SHOP Marketplace may qualify to receive a Small Business Health Tax Care Credit. To be eligible, a business must have less than 35 full-time employees who are making an average of less than $50,000 a year. Starting next year, those businesses that qualify can earn credits worth as much as up to 50 percent of their contribution toward employees' premium costs. The smaller the business, the larger the credit they can earn. The credits are highest for businesses with fewer than 10 employees who are paid less than $25,000 a year.
Small businesses have the option of hiring a licensed agent or broker to help find the best insurance options
Since navigating the new health care landscape can be confusing, Obamacare gives small businesses the option of working with a licensed agent or broker. These health care experts can be hired to help small business owners review and compare various coverage plans, choose a plan that best fits their needs, and actually apply for the insurance.
Small businesses that want insurance via the SHOP Marketplace have the choice of several different options
Thee are four different categories of health care coverage businesses can opt for through the SHOP Marketplace: Bronze, Silver, Gold and Platinum. Each plan offers similar benefits, such as ambulatory patient services, emergency services, hospitalization, pediatric care and preventive wellness services, but are different based on the how much money employees contribute to the costs through their monthly premiums, as well as co-pays, deductibles and other out-of pocket costs.
The self-employed are not considered an employer and must use the individual marketplace to find coverage
Those who are self-employed, and who have no employees, aren't eligible for insurance through the SHOP Marketplace. Since the self-employed are not considered an employer, even if they hire outside contractors to do some work, they can only obtain health care coverage through the Individual Marketplace, which also opened for enrollment this week.
While they might not have to offer them insurance, most businesses need to notify employees about the new Health Insurance Marketplace
Starting this week, all businesses that are covered by the Fair Labor Standards Act must provide a written notice to employees informing them about the Marketplaces, that they may be able to get lower costs through private insurance in the Marketplace based on their income, and that if they buy insurance through the Marketplace, they may lose the employer contribution to their health benefits.
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