Like it or not, the U. S. Patient Protection and Affordable Care Act (ObamaCare) is now law, and small businesses should be aware of their responsibilities and the impact it may have on their businesses.
You should consult with a competent benefits management company or other qualified advisor to make sure you are in compliance and able to deal with any changes as cost-effectively as possible. Additionally, be aware that some of the details about the program have yet to be worked out, so having access to benefits professionals is a good idea.
Seven key facts about the Act as they are currently understood:
Small businesses with 50 or more full-time employees are required to provide their workers with health insurance beginning in 2014. If the company does not provide health care coverage, it will be assessed a financial penalty.
Contrary to some reports, if the business already provides health care insurance, it does not have to change its current plan or provider.
The government has mandated the establishment of Affordable Insurance Exchanges in each state that will offer private health care insurance to companies or individuals. The objective is to provide businesses with a resource for finding the best and most cost-efficient plan for their situation. Some states, however, have declined to establish such an Exchange, and companies in those states must use the Affordable Insurance Exchange set up by the federal government.
Employers with 25 or fewer full time employees with average wages of $50,000 or less, and who pay at least one-half of the health care premium cost may be eligible for subsidies to help offset the cost of health care plan premiums. Smaller employers may get additional subsidies.
You can claim these premium subsidies or “Small Business Premium Tax Credits” as they are officially called, on your annual income tax return, using IRS form 8941 to calculate your credit.
Employers will also be responsible for providing a Summary of Benefits and Coverage statement to all employees. Fortunately, the insurance company that provides your health care plan, or the outside benefits management firm you use can prepare these for you.
As this is written, there are many details about the Patient Protection and Affordable Care Act that are still being worked out by the government. However, indications are that late this summer or early autumn you’ll be required to provide information to all employees and new hires regarding the health care options available under the Act. This will also mark the first enrollment period for your employees. So now is the time to prepare.