The Affordable Care Act (ACA), or ObamaCare, offers open enrollment for 2015 until February 15. A couple of new provisions kick in this year that, as an employer, you’ll want to know about.
The law can seem confusing (it’s over 1,000 pages, for one thing), but fortunately there’s information aplenty online. The “Affordable Care Act Summary” at obamacarefacts.com breaks down the ACA section by section.
The ACA continues to be in the news with the Republican controlled House of Representatives voting yet again to repeal ObamaCare. For now, it’s a political game as Obama will certainly veto any such bill. In the meantime, the most important legal challenge to the law is King vs. Burwell in front of the Supreme Court this coming March and concerning the eligibility of subsidies for federally funded health insurance exchanges. A decision is expected by the end of June and current thinking is regardless of the decision, the government will find a creative solution to keep subsidies for federally funded participants.
None of this changes the rapidly approaching deadlines and provisions kicking in this year especially for small businesses. Here are some highlights to help you navigate your way.
The Small Business Health Options Program, or SHOP, a part of each state’s health insurance marketplace, lets small businesses with 50 full-time employees (FTE) or less shop for group health plans. Starting on November 15th, 2015 those with 100 full-timers or less can use the SHOP.
The online SHOP opened on November 15, 2014, and small businesses can also apply for SHOP plans and tax credits using a paper application.
Small businesses that have fewer than 25 FTE, with average annual wages below $50,000, can get tax credits (as adjusted for inflation beginning in 2014) to help pay for employee premiums.
Tax credits are retroactive since 2010 so you can still claim your health insurance tax credit for any year since 2010.
You’ll need to file Form 8941 to claim your Tax Credit. ObamaCare Facts’ simplified instructions for Form 8941, Credit for Small Employer Health Insurance Premiums,” provides details.
Businesses with over 50 FTE are required to provide health coverage to full-time employees—often refereed to as the employer mandate—is officially part of the ACA’s Employer Shared Responsibility Provision. The fee for not covering employees is called a Shared Responsibility Payment.
Small businesses with more than 100 full-time equivalent employees, with average annual wages above $250,000, must provide health coverage to at least 70% of FTE starting in 2015 and 95% of FTE starting in 2016.
Starting in 2016 employers with 50-99 FTE will have to insure their full-time workforces as well.
Shared Responsibility Payment
For employers with 50 or more FTE, who don’t provide coverage, the fee is $2,000 per full-time employee (minus the first 30 FTE).
For employers with 50 more FTE, who do provide coverage, but that coverage doesn’t provide minimum value or isn’t affordable, the fee is the lesser of:
- $3,000 per FTE receiving the subsidy
- $2,000 per FTE (minus the first 30)
Transition relief is available to small businesses and large businesses transitioning into compliance with the new mandate. The IRS offers a Q & A about the rules.
Medicare Part A Tax
Businesses making over $250,000 in profit must pay a 0.9% increase on the current Medicare part A tax. The tax is split (0.45% each) between the employer and employees making over $200,000 per individual or $250,000 per family. You can find Obama Care Facts’ breakdown of tax impacts at “ObamaCare Tax: Full List of ObamaCare Taxes.”
Inform Your Employees
All businesses with over 50 FTE have to let their employees know about their state’s health insurance marketplace/exchange. See “What Do I Need to Tell My Employees about ObamaCare?” for details.
A Complete ACA Guide
Another place you can find information on the ACA is FitSmallBusiness.com, where David Waring, cofounder of Marc Waring Ventures LLC, its parent company, has posted “Obamacare Explained: The Ultimate Guide for Small Businesses.”
Should You Participate?
As CNBC notes in “Obamacare sign-ups hit 9.5M, strong pace as deadline looms,” according to Health & Human Services, 9.5 million people are enrolled in ObamaCare’s state and federal marketplaces as of January 16, 2015. This includes 7.16 million on HealthCare.Gov and 2.4 million in state-based insurance exchanges.
At CNNMoney, Kaiser Health News writer Jay Hancock posted “Small businesses shift employees to Obamacare,” which notes that some businesses are canceling company-provided health insurance plans and allowing employees to enroll in ObamaCare. He cites Adam Berkowitz, a consultant with benefits firm Caravus:
“Whether to cancel a company plan and let workers buy insurance on healthcare.gov or another online exchange ‘is something that I would say comes up in every conversation with a small-group’ employer.”
Skip Woody, a partner at another benefits firm, Hill, Chesson & Woody, also contributes to Hancock’s article:
“Businesses shifting workers into the individual exchanges tend to be the very smallest, employing a handful of people. ‘Anything above 15, we haven’t had any dropping coverage.’”
Instead, Hancock observes, many small companies are taking advantage of rules letting them maintain insurance bought before the ACA took effect.
“President Obama allowed carriers to temporarily extend noncompliant plans after facing fierce criticism over their imminent extinction.”
Do Your Homework
If you’re considering participating in ObamaCare, research all your options, advises CNNMoney senior writer Tami Luhby in “ObamaCare premiums: Going up unless you shop.”
“Many more insurers are offering plans for 2015, so most [employers and] consumers will have a wider selection in terms of premiums, deductibles, doctor networks and coverage options, experts said. That’s why it’s crucial that people browse through all the Obamacare plans available.”
We at gThankYou! wish you and your employees a healthy 2015, whatever coverage options you choose.
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