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The Affordable Care Act( Obamacare ) includes a variety of measures specifically designed for small businesses that help lower premium cost growth and increase access to quality affordable  small business health insurance.  Depending on whether you are self-employed, an employer with fewer than 25 employees, an employer with fewer than 50 employees, or an employer with 50 or more employees, different provisions of the Affordable Care Act may apply to you. Learn about the key provisions of the Affordable Care Act based on the size of your business.

 

 

For the Self-Employed

 

Starting in 2014, the Individual Shared Responsibility provisions of the Affordable Care Act call for each individual to have basic health insurance coverage (known as minimum essential coverage), qualify for an exemption, or make a shared responsibility payment when filing a federal income tax return. Individuals will not have to make a payment if coverage is unaffordable, if they spend less than three consecutive months without coverage, or if they qualify for an exemption for several other reasons, including hardship and religious beliefs. Minimum essential coverage includes, at a minimum, all of the following categories: Employer-sponsored coverage (including COBRA and retiree coverage), coverage purchased in the individual insurance Marketplaces, Medicare Part A coverage, Medicaid coverage, Children's Health Insurance Program (CHIP) coverage, certain types of Veterans health coverage, and TRICARE. It does not include certain specialized coverage such as only for vision or dental care, workers’ compensation, or coverage only for a specific disease or condition.

Coverage through Medicaid Expansion

Each state operates a Medicaid program that provides health coverage for lower-income people, families and children, the elderly, and people with disabilities. The eligibility rules for Medicaid are different for each state, but most states currently offer coverage for adults with children at some income level. In addition, under the Affordable Care Act, states have the option to expand Medicaid eligibility to include adults ages 19 – 64 with incomes up to 133% of the Federal Poverty Level (about $15,000 per year for an individual, $31,000/year for a family of four).

                        Key Provisions Under the Affordable Care Act( Obamacare ) for Employers with Fewer Than 25 Employees

Implementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014.  Some of the provisions that may impact employers with fewer than 25 employees include:

·Small Business Health Care Tax Credits

The small business Health Care Tax Credit helps small businesses afford the cost of health care coverage for their employees and is specifically targeted for those businesses with low- and moderate-income workers.  The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. Since 2010, businesses that have fewer than 25 full-time equivalent employees, pay average annual wages below $50,000, and that contribute 50% or more toward employees’ self-only health insurance premiums may qualify for a small business tax credit of up to 35% to help offset the costs of insurance.  In 2014, this tax credit goes up to 50% and is available to qualified small businesses that participate in the Small Business Health Options Program (SHOP). Eligible small employers can claim the current credit through 2013, and the enhanced credit can be claimed for any two consecutive taxable years beginning in 2014 through the SHOP.

 

Summary of Benefits and Coverage (SBCs) Disclosure Rules

Employers are required to provide employees with a standard “Summary of Benefits and Coverage” form explaining what their plan covers and what it costs. The purpose of the SBC form is to help employees better understand and evaluate their health insurance options.

 Penalties may be imposed for non-compliance.

 

90-Day Maximum Waiting Period

Beginning January 1, 2014, individuals who are eligible for employer-provided health coverage will not have to wait more than 90 days to begin coverage.

                        Key Provisions Under the Affordable Care Act ( Obamacare ) for Employers with 50 or Fewer Employees

Implementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014.  Some of the provisions that may impact employers with 50 or fewer employees include:

Small Business Health Options Program (SHOP)

Starting in 2014, small businesses with generally up to 50 employees will have access to the new health care insurance marketplaces through the Small Business Health Options Program (SHOP).  Currently, small businesses may pay on average 18% more than big businesses for health insurance because of administrative costs. SHOP will offer small businesses increased purchasing power to obtain a better choice of high-quality coverage at a lower cost.  Costs are lowered because small businesses can pool their risk. To enroll, eligible employers must have an office within the service area of the SHOP and offer SHOP coverage to all full-time employees. 

Summary of Benefits and Coverage (SBCs) Disclosure Rules

Employers are required to provide employees with a standard “Summary of Benefits and Coverage” form explaining what their plan covers and what it costs.  The purpose of the SBC form is to help employees better understand and evaluate their health insurance options.  Penalties may be imposed for non-compliance.

90-Day Maximum Waiting Period

Beginning January 1, 2014, individuals who are eligible for employer-provided health coverage will not have to wait more than 90 days to begin coverage.

 

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