Small Business & Obamacare

1.  Businesses with Fewer than 25 Employees- Small Business Tax Credits

The Affordable Care Act does not require that businesses provide health insurance.

·         But it does offer tax credits for eligible small businesses that choose to provide insurance to their employees. 

·         To qualify for a small business tax credit of up to 35% (up to 25% for non-profits), you must have:

-           Fewer than 25 full-time equivalent employees

-           Pay average annual wages below $50,000

-           Contribute 50% or more toward employee health insurance premiums

-           Beginning in 2014, this tax credit goes up to 50% (35% for non-profits) and is available to qualified small businesses who participate in the Small Business Health Options Program (SHOP) Exchanges.

2. Businesses with 50 or Fewer Employees- Affordable Insurance Marketplaces

The Affordable Care Act does not require that businesses provide health insurance.

·         But beginning in 2014, small businesses with generally 50 or fewer employees will be able to purchase coverage through SHOP. 

·         Competitive marketplaces where small employers can go to find health coverage from a selection of providers. 

·         The SHOP Marketplaces and Individual Marketplaces for those who are self-employed open on January 1, 2014.

-           Open enrollment begins on October 1, 2013. 

-           SHOP will offer small businesses increased purchasing power similar to that of large businesses.

3.  Businesses with 50 or More Employees- Employer Shared Responsibility Provisions

Employers are not required to provide coverage to their employees under the Affordable Care Act.  

·         However, beginning in 2014, businesses with 50 or more full-time employees (or full-time equivalents)

·         that do not offer affordable health insurance that provides a minimum level of coverage to substantially all of their full-time employees (and their dependents)

·         may be subject to an employer shared responsibility payment

·         if at least one of their full-time employees receives a premium tax credit to purchase coverage in an insurance Marketplace. 

-           A full-time employee is generally one who is employed an average of 30 or more hours per week. 

from article by Meredith Olafson: