ObamaCare and Your Small Business: Know Your Obligations

Relatively recently, Congress passed the Affordable Care Act, or the ACA. Better known as ObamaCare, it is a governmental effort to ensure all people have health insurance. In a recent report, almost half of America’s uninsured were determined to be small business owners, employees, or their dependents.  Therefore, the government sought to target small business owners in an attempt to ensure that their employees receive health insurance.

As part of the ACA, small businesses are set to have either obligations or incentives in order to provide health insurance for their employees.  Whether or not ObamaCare incentivizes or mandates small businesses to provide health insurance depends on the size of the business.

Small Businesses with 50 or Fewer Employees: Incentives. As part of ObamaCare, the government put forth certain tax breaks and credits via the Small Business Health Options Program, or SHOP.  Under the SHOP, small businesses with the equivalent of less than 50 full-time workers, making less than $50,000 in average annual wages are given tax incentives to provide their employees health benefits.  Additionally, the SHOP Marketplace provides lower costs on group plans and allows them to claim the aforementioned tax credits.  By 2016, SHOP tax incentives will be provided to small businesses with 100 or fewer employees.

Small Businesses with 50 or More Employees: Mandate. ObamaCare’s current health insurance mandate applies to employers with 50 or more employees.  By 2016, these employers must provide health insurance to at least 95% of their full-time employees and dependents up to age 26. If the business refuses to do so, it faces a fine.  If an employer owes the fine because they didn’t cover workers, they pay a $2,000 fee per full-time employee, excluding the first five.  The employer has the option of paying this fine in a monthly installment plan.  Although employers are not required to provide ObamaCare to their employees, they must provide coverage that meets minimum value pursuant to ObamaCare requirements.

If you are a small business owner, you need to be aware of health insurance coverage requirements you must provide to your employees.  What is required of your company will depend on the size of your business.  Consulting with an experienced legal team that specializes in assisting small business owners meet all of their legal needs can help ensure you are meeting the requirements of the Affordable Care Act.  Call the Trembly Law Firm at (305) 431-5678 today to schedule your consultation.