The Affordable Care Act (ACA): Answers to Your Small Business Questions

Most employers have questions about the Affordable Care Act (ACA), regardless of whether they are small or large businesses. Here are answers to the most commonly asked questions from ESG’s UAHU–certified Affordable Care Act experts, barring any more delays in the ACA implementation.

Q: If I have less than 50 employees, do I have to offer insurance?
A: No employer has to offer insurance for 2014, as all penalties have been postponed a year. However, large employers (50+ employees) need to start thinking about offering health insurance (if they don’t already do so) because of the penalties that will kick in as of 2015. The individual mandate has not been lifted, however – meaning all of your employees will need to have health insurance or face an individual penalty, regardless of whether you offer coverage or not.

Q: I’m a small business and am considering offering medical insurance. Should I do it?
A:  Offering health insurance coverage will help you maintain your status as a competitive employer for key talent, especially now that the general public will be required to be insured come 2014. Consider running a cost-benefit analysis for the Small Business Tax Credit (available to employers with less than 25 full-time employees) and look at the SHOP Exchange for available plans. Here’s a link for more information about the tax credit: http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers

Q: If I’m a small employer and offer medical insurance (which technically isn’t required), do I need to follow the ACA guidelines for affordability and meet the minimum essential coverage guidelines?  
A. Yes. If your plan renews in January 2014 or any other time after that, then those changes will need to be made to meet the ACA regulations, regardless of your size. If your plan renews between now and the end of 2013, you will not have to make plan design changes until 2014.

You currently have options to consider (keeping in mind the penalties for large employers don’t begin until 2015):
1.    Amending your plan to meet the regulations;
2.    Dropping your plan and providing a benefit for your employees to purchase coverage through the SHOP Exchange; or
3.    Dropping all forms of coverage. However, this option may have ramifications in the future for employee retention.

Q. I’m a small employer and offer insurance. Can my employees go to the Exchange to get coverage?
Employees can always shop the Exchange for coverage, but they may not qualify for federal subsidies. For instance, if there is an employer contribution towards an employee’s health plan and the employee decides to shop the Exchange, then the employee will not qualify for subsidies. Likewise, if the small employer plan is considered affordable, an employee will not qualify for subsidies.

If you have any ACA questions, please contact us.
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