The Affordable Care Act, signed into law by President Obama on March 23, 2010, includes a variety of measures designed specifically for small businesses. Aimed at decreasing the number of uninsured Americans, these measures help lower premium costs growth and increases access to affordable health insurance. Depending on whether you are self-employed, or are an employer with fewer than 25 employees, different provisions of the Affordable Care Act may apply to you. It is important to know which provisions are applicable to your business and what it could mean for your employees.
The Affordable Care Act will be implicated in stages, with many reforms and requirements taking effect in 2013 and 2014. Some provisions that may impact self-employed individuals include:
- Individual Shared Responsibility Provisions: Starting in 2014, the Individual Shared Responsibility provisions call for individuals to have basic health insurance coverage, qualify for an exemption, or make a shared responsibility payment when filing a federal income tax return. For more information on the Individual Shared Responsibility requirements and exemptions, refer to the fact sheet from the U.S Department of Treasury as well as this question and answer sheet from the IRS.
- Individual Insurance Marketplaces: Starting in January, 2014 the individual health insurance marketplace will offer a choice of four levels of benefit packages that differ by the percentages of costs the health plan covers.
- Coverage through Medicaid Expansion:
The eligibility rules for Medicaid differ from state to state. To learn more about your state Medicaid program and other options available to you, use the insurance and coverage finder (http://finder.healthcare.gov/) or visit Medicaid.gov.
- Medical Loss Ratio Rebates: For more information on the federal tax treatment of Medical Loss Ratio, visit IRS’s FAQ
- Limits on Flexible Spending Account Contributions: To learn more about FSA Contributions, as well as what is excluded from the cap, please refer to this document provided by the IRS.
- New Medicare Assessment on Net Investment Income:
Please visit the net investment income tax FAQ, provided by the IRS for more information.
Employers with Fewer Than 25 Employees
The Affordable Care Act will be implicated in stages, with many reforms and requirements taking effect in 2013 and 2014. Some provisions that may impact employers with fewer than 25 employees include:
- Small Business Health Care Tax Credit:
The small business Health Care Tax Credit helps small business afford the cost of health care coverage for their employees. To find out if you are eligible for a small business tax credit please visit this FAQ.
For more information on the Small Business Health Options Program (SHOP), refer to this link.
- Summary of Benefits and Coverage (SBC’s) Disclosure Rules: Employers are required to provide employees with a standard “Summary of Benefits and Coverage” form explaining what their plans cover and what it costs.
- Medical Loss Ratio Rebates:
For more information on the federal tax treatment of Medical Loss Ratio, visit IRS’s FAQ
- Limits on Flexible Spending Account Contributions:
To learn more about FSA Contributions, as well as what is excluded from the cap, please refer to this document provided by the IRS.
- New Medicare Assessment on Net Investment Income: Please visit the net investment income tax FAQ, provided by the IRS for more information.
- 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 being coverage. Refer to these temporary guidelines, provided by the IRS for more information.
- Transitional Reinsurance Program Fees:
Find out more about this three-year program which reimburses insurers in the individual insurance Marketplaces for high claim costs.
- Workplace Wellness Program:
The Affordable Care act offers new incentives to employers who promote employer wellness programs and encourage opportunities to support healthier workplaces.
- Health Insurance Coverage Reporting Requirements:
Beginning with health coverage provided on or after January 1, 2014, employers that sponsor self-insurance plans must submit reports to the IRS. For more information on these reports, refer to this document.
The top three things small business should be aware of regarding the Affordable Care Act.
Discover online tools to help you find and price small business health care insurance options.
View the Affordable Care Act timeline.
For more information on the revisions that may impact you and your small business, please visit the U.S Small Business Administration.