As your business works to navigate the provisions of the Affordable Care Act (ACA), the Chamber is here to help. We're working with our partners to bring you resources that can help you better understand what's ahead for healthcare reform and make the best decisions for your business.
Healthcare Exchange Notification to Small Business Employees Due October 1, 2013
Businesses with at least one employee and $500,000 in annual revenue must notify all employees by letter about the Affordable Care Act's health-care exchanges beginning October 1, 2013, or possibly face penalties for non-compliance. The requirement applies to all businesses regulated under the Fair Labor Standards Act, no matter its size. Going forward, all new hires should receive the letter within 14 days of their start date.
To assist with compliance, the U.S. Department of Labor provides two sample notices - one for employers who do not offer a health plan and another for employers who do offer a health plan:
1. Sample Notice for employers who offer a health plan
2. Sample Notice for employers who do not offer a health plan
The Affordable Care Act - A Primer
Became Law: Signed by President Obama on March 23, 2010, ruled constitutional by the U.S. Supreme Court in June 2012. Referred to as “ACA” or “Obamacare”
In January, 2014 the Patient Protection and Affordable Care Act becomes fully effective. Legal proceedings, delays in rulemaking and political battles have made it difficult to discern exactly what America’s employers are expected to do to comply with this law. As every situation is different, you are encouraged to consult with your accountant or legal adviser to determine how a particular provision of the ACA may impact your business.
As of April 2014 here are the things that we do know:
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Employers with 50 or more Full-Time Equivalent (FTE) employees must provide affordable, qualified healthcare. If they do not, penalties and fines will be assessed. For the purposes of the ACA, full time is 30 hours per week. This has been delayed until 2015.
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Employers with 50 or fewer FTE’s are exempt from employer responsibility policies. There is no fine if they do not provide coverage. There is no fine if an employee qualifies for tax credits.
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Small businesses and small non-profits (those with less than 25 FTE) may be eligible for Small Business Tax Credits. These could cover as much as 50% of an employer’s cost to provide healthcare to employees.
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The Health Insurance Marketplace is opened for enrollment on November 15, 2014 and enrollment will end on February 15, 2015. Ohio has deferred to a marketplace (also called healthcare exchange) operated by the Federal government. To enroll, use www.healthcare.gov.
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The Small Business Health Options Plan (SHOP) will provide health plans offered by private health insurance companies, similar to how small group plans are currently offered. The SHOP has been delayed to 2015.
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An employer who has provided health care benefits and has not made changes to their plan since March of 2010 has “grandfathered” status.
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Individuals were required to obtain health insurance either through their employer or the healthcare exchange by Jan. 1, 2014. While fines were included in the original law, they were delayed to 2015. Those for whom it is deemed financially impossible will be given a waiver. Healthcare is determined “unaffordable” if the cost of a premium exceeds 8% off an individual’s income.
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Common ownership of multiple businesses can cause a company to exceed the 50 FTE requirements. If employees from all businesses total 50 or more FTE they will be classified as a large business even though they are a small business, forcing them to provide health insurance or pay the penalty. This is true even though none of the individual businesses exceed 50 FTE. Common ownership in a company is 80% or more.
Grandfathered Status for Small Groups in 2014
What is grandfathered status?
This means your health plan design was in place prior to March 23, 2010, when the Patient Protection and Affordable Care Act was signed into law. Grandfathered status is based on the benefit plan design, not on employees enrolled in the plan design. Learn more about grandfathered status and the advantages of maintining this status by viewing/downloading this fact sheet.
Recommended Web Resources
www.healthcare.gov
IRS - http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions
U.S. Small Business Administration - http://www.sba.gov/healthcare
U.S. Department of Health and Human Services - http://www.hhs.gov/opa/affordable-care-act/
U.S. Department of Labor - http://www.dol.gov/ebsa/healthreform/index.html
Premium Stabilization Rule (aka $63 head tax). Rule begins on page 52:
http://www.gpo.gov/fdsys/pkg/FR-2013-03-11/pdf/2013-04902.pdf
Other Resource Links
Glossary of Health Coverage and Medical Terms
ACA Timeline Highlights
Healthcare Re-Forum newsletter on taxes and fees under the ACA