The Affordable Care Act: Attainable Coverage for Small Businesses

Under the Affordable Care Act, small employers will have more options than ever when it comes to health insurance.

The Affordable Care Act: Attainable Coverage for Small Businesses

By SBA Region 7 Administrator Patricia Brown-Dixon

America’s 28 million small businesses are the backbone of our economy, creating two out of every three net new jobs and employing half of America’s workforce. From mom-and-pop stores and restaurants, to high-tech startups and productive manufacturers, 115,038 small businesses are helping to drive Missouri’s economy and create jobs in our local communities.
Many small business owners consider their employees to be part of their family, and providing benefits such as health care is one important tool they have to help retain their talented workforce and compete for skilled employees.  But even though many businesses want to offer their workers health insurance, in the past they have often been unable to afford it, for reasons like steadily climbing rate increases and limited coverage.

The U.S. Small Business Administration (SBA) is committed to giving small business owners the resources they need to start and grow a business– including access to critical information about how the Affordable Care Act is opening up better health care options for small business owners and entrepreneurs.

Under the Affordable Care Act, small employers will have more options than ever when it comes to health insurance.  As these provisions continue to go into effect in the next several years, it’s important for small business owners to stay informed about what they need to do to comply with and take advantage of the Affordable Care Act.

First, starting January 1st, 2014, small businesses with generally up to 50 full-time equivalent employees will be able to purchase health insurance through the online health insurance marketplace for small businesses, known as SHOP.

The SHOP Marketplace will offer employers a choice of qualified health plans from different private health insurers and make it easier for employers to make side-by-side comparisons between these plans, based on price and benefits.

SHOP also offers employers and their employees access to health insurance plans that must include a package of “Essential Health Benefits” like coverage for doctor visits, preventive care, hospitalization and prescriptions.  Many small employers may be eligible for tax credits of up to 50% of their premium costs if they choose to purchase coverage through SHOP.

Enrollment in the federal SHOP marketplace, operated by the U.S. Department of Health and Human Services, starts on October 1st for coverage beginning January 1, 2014.Information on how the law affects your business, and instructions on how to preview the health insurance policy offerings in SHOP when they are ready on Oct. 1, are available via a new, streamlined web tool for businesses housed at Business.USA.gov/healthcare.

The Affordable Care Act calls on all employers that are covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), to notify their employees about the coverage options available to them through the health care Marketplace, whether or not the employer currently offers health coverage.  Employers are required to  provide this notice to all current full-time and part-time employees by October 1, 2013, as well as all new employees at the time of hire beginning October 1st.

The Affordable Care Act allows small employers to offer health coverage in a way that makes sense for their business and works for their bottom line, and the SBA is committed to leveraging our resources and federal partnerships to connect you with the facts and resources you need to understand the law.

To learn more, contact the SBA St. Louis District Office at 314-539-6600 or visit the website at http://www.sba.gov/mo/stlouis.

The Affordable Care Act and Small Business

Myth vs. Fact- Myth #1: All Businesses Will Be Required to Provide Health Insurance to All of Their Employees

http://www.sba.gov/community/blogs/community-blogs/health-care-business-pulse/myth-vs-fact-myth-1-all-businesses-will-b

by Meredith K. Olafson, Meredith K. Olafson is Senior Policy Advisor for the U.S. Small Business Administration

February 20, 2013, 4:00 pm

As a business owner, it’s important to understand how the Affordable Care Act can affect your business. However, with so many misconceptions about how the Affordable Care Act works, this can be difficult.  To clarify the myths versus facts, we’re launching a new blog series called “Myth vs. Fact: The Affordable Care Act and Small Business”.

This blog covers one of the most common myths we’ve seen out there:

Myth: All businesses will be required to provide health insurance to all of their employees.

Fact: Employers are not required to provide coverage to their employees under the Affordable Care Act.  However, starting in 2014, some businesses that do not offer health coverage to their full-time employees may be subject to a shared responsibility payment under the health care law.

How do I know if I may be subject to an Employer Shared Responsibility Payment?

Businesses with 50 or more full-time or full-time equivalent (FTE) employees that do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees (and dependent children under the age of 26 starting in 2015) may be subject to a shared responsibility payment if at least one of their full-time employees receives a premium tax credit in an Affordable Insurance Exchange, or Marketplace.   For the purposes of these provisions, a full-time employee is one who is employed an average of at least 30 hours per week.

Businesses will not be affected by these provisions if they already offer affordable health coverage that provides a minimum level of coverage to their full-time employees, which is the vast majority of these businesses.

Businesses with fewer than 50 full-time or FTE employees are generally not affected by these provisions.  However, it’s important to know that if companies have a common owner or are otherwise related, their total combined number of employees is used to determine whether each separate company is subject to these provisions — even if none of the member companies individually employ 50 or more full-time or FTE employees.

How can I find out if I meet the threshold number of 50 or more full-time or FTE employees?

To assist employers, the IRS has developed a helpful set of Q&As on the Employer Shared Responsibility provisions. The IRS has also issued a set of proposed rules   relating to the Employer Shared Responsibility provisions, and is accepting written or electronic comments by or before March 18, 2013.

Understand the Affordable Care Act as a Small Business Owner

What does the health care law mean to you? Check out these resources that explain the key provisions of the law plus an overview of what is changing and when.

For a clear overview of how the law impacts small businesses, the Small Businesses and the Affordable Care Act guide breaks down the top things you need to know, including information about the following:

The Small Business Tax Credit and your eligibility to claim it.

Affordable Insurance Marketplaces, known as the Small Business Health Options Program (SHOP), will open on January 1, 2014 and give small employers buying power—similar to what large businesses have to get better choices and lower prices.  The SHOP Marketplaces will work with new insurance reforms and tax credits provided by the Affordable Care Act to help lower barriers to offering health insurance that small employers face.  Visit Healthcare.gov’s small business landing page for the latest information on SHOP, and review the get-ready checklist for small business owners.  Enrollment in SHOP begins on October 1, 2013.

This useful Small Business Q&A also helps you understand your rights and responsibilities as a small business owner.

Find Healthcare Insurance Options for Your Small Business

Looking for insurance for yourself or your employees? Healthcare.gov’s Insurance Finder organizes and presents information and pricing collected from insurers to help you better understand your options. Enter some basic data and the tool will filter your options accordingly.

http://www.sba.gov/community/blogs/online-tools-help-you-find-and-price-small-business-health-care-insurance-options

www.sba.gov/healthcare

Healthcare.gov