In March of 2010, the Affordable Care Act was enacted with the intent of making health insurance more widely available. Commonly referred to as the ACA, if you’re a business owner it’s important to make sure you’re in compliance with the act. For most businesses, the coverage provided costs less than it did prior to the statute due to changes in how premiums are calculated, which is a nice win-win for you and your employees. Today we’ll be taking a look at how the act functions, whether your business qualifies, and your options within the ACA.
Is my business subject to the ACA?
The Affordable Care Act functions slightly differently for businesses designated “small” or “large”, which is decided by the number of full-time employees your business employs. If your business has more than 50 full-time employees (people who work on average more than 30 hours a week), you are considered a large business for the sake of the ACA. Otherwise, you’re likely considered a small business. This calculation isn’t as clear-cut as it seems, though. If your employees work variable hours, or you have more than 50 employees who work on average less than 30 hours, it’s recommended to re-calculate your total work hours monthly and check these numbers against the official mandates to ensure you remain in compliance. Businesses found to be in noncompliance could be subject to a penalty tax of up to $100 per day, per affected individual for each day they are found to be in noncompliance.
What does the ACA do for my employees?
Small businesses do not have to follow most of the rules provided by the ACA, but if you offer health insurance to any of your full-time employees, you must offer it to all of them. If your small business has less than 25 employees, it may be eligible for tax credits should you offer coverage to your employees. Large business owners, on the other hand, have to comply with the full extent of the ACA. You must either provide coverage for at least 95 percent of your full-time employees or “pay” your way out. For qualifying employees, this means they’ll be provided healthcare which at least meets the law’s standards of coverage and affordability.
What other options do I have?
As opposed to offering health insurance, your business has the option to pay federal fines. The amount you would pay varies year to year, but in 2022 the amount is $2,750 for each full-time employee, minus the first 30 full-time employees. If your business sat right at 50 employees, you would pay $55,000, which is not a cheap way out.
This is by no means an exhaustive guide to the requirements and regulations of the Affordable Care Act. Noncompliance could mean even heavier fines than paying your way out, so it’s recommended to consult an experienced legal advisor to ensure your business is in compliance. Call Trembly Law Firm today at (305) 985-4571 for more information.
Trembly Law Firm
9700 South Dixie Hwy Penthouse 1100
Miami, Florida 33156