Federal Healthcare Rules for Small Business Owners

Posted by on February 26, 2014 in Business Insurance [ 0 Comments ]

SHOP for small businessesPolitics aside, the new healthcare law that went into effect on January 1, 2014 provides millions of Americans with health insurance, many for the first time.  While providing health insurance is not mandatory for businesses with less than 50 employees, offering health care could be a good way to earn the trust and loyalty of both your employees and your community.  It may also give you an advantage in hiring, as a prospective employee might choose your business over another that does not provide health care benefits.

Related: What do the Fortune 100 Companies Offer Their Employees?

Here are some items small business owners should consider:

  1. Am I required to offer health insurance? 
  2. How does the law define a Full-Time Equivalent employee (FTE)?
  3. Can I still offer health insurance, even though I’m not mandated to?
  4. What is the Small Business Health Options Program (SHOP)?
  5. What health benefits does SHOP cover?
  6. How many employees must enroll in SHOP?
  7. How do I claim the Small Business Health Care Tax Credit?

Offering health insurance also provides small business owners with an opportunity to make your business that much more appealing to current and prospective employees, and even appeal to customers who support the right to universal healthcare.  It also has rules and regulations specific and tailored to small business owners.  For instance, businesses with fewer than 50 employees are NOT required to offer health coverage – but now both multinational corporations and small business owners must be aware of the laws implications.

The SHOP Marketplace

Businesses with 50 or fewer full-time equivalent (FTE) employees can use the Small Business Health Options Program (SHOP) to offer coverage to their employees. This applies to non-profit organizations as well. You control the coverage you offer and how much you pay toward premium costs.

  • View detailed questions and answers on SHOP procedures, including eligibility, application, enrollment, employee communications, and more.
  • You can sign up and begin offering coverage any time during the year. Enroll by the 15th of the month and coverage can start as soon as the 1st of the next month.
  • Preview plans and prices based on the size of your business and the ages of your employees using our premium estimation tool.

Employers with 50 or fewer full-time equivalent employees don’t face a penalty for not offering health coverage.

View detailed questions and answers on SHOP procedures, including how to count your employees.

Related: Choosing the Right Insurance for Your Small Business

You have health coverage rights

Insurance plans:

  • Can’t turn you down based on the health status of your employees or their dependents, even if they have pre-existing conditions.
  • Can’t charge you higher premiums for women, or increase your group’s premium for employees with high medical costs.

These rights don’t apply to grandfathered plans.

Contact your State Department of Insurance to learn more about your rights.

You may qualify for tax credits if you offer coverage through SHOP

If you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less, you may qualify for a small business health care tax credit.

  • The tax credit is worth up to 50% of your contribution toward employee premium costs (up to 35% for tax-exempt employers). This will make the cost of providing health coverage lower.
  • The small business health care tax credit is available only if you get coverage through the SHOP Marketplace.

Apply for SHOP coverage

  • To learn more about how to apply for SHOP coverage, pick your state and you’ll discover your next steps.

Have questions about the SHOP Marketplace for businesses with 50 or fewer employees? Call 1-800-706-7893 (TTY: 1-800-706-7915). Hours: Monday through Friday, 9 a.m. to 7 p.m. EST. Agents and brokers may also use this number.

Businesses with 50 or more employees could face payments in 2015

The Employer Shared Responsibility payment is a new requirement under the health care law for some employers. It will take effect in 2015.

It will apply only to employers with 50 or more full-time equivalent (FTE) employees that don’t offer coverage or whose coverage doesn’t meet certain minimum standards.

Learn more about the Employer Shared Responsibility Payment

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