The Affordable Care Act includes a number of provisions that pertain to employers. One mandate requires businesses with 50 or more full-time equivalent employees to provide health insurance coverage or pay a penalty. This provision is effective for large employers in 2015. Businesses with between 50 and 99 employees will have until 2016 to phase in coverage for their employees. There are penalties for employers who are not providing insurance that meets minimum coverage levels. There are also penalties if employees are insured but qualify for savings by using the insurance marketplace in their state. The act also requires employers with more than 200 employees to automatically enroll workers into health insurance plans offered by the employer. Tax credits are available to many small employers to help assist them with the requirements.
Small employers will be encouraged to use their state’s employer health insurance marketplace, also called the Small Business Health Options Program (SHOP), to purchase insurance coverage for their employees. Small businesses are not mandated to use SHOP insurance products, but they will not qualify for health insurance tax credits if they purchase their insurance outside of the program. Starting in 2014, small businesses with 50 or fewer full-time employees can use the SHOP marketplace to purchase health insurance for their employees. In 2016, small businesses with 100 or fewer full-time employees will also be able to purchase insurance in the SHOP marketplace.
Download this illustration from the Kaiser Family Foundation to learn how requirements and penalties apply for employers not offering affordable coverage under the ACA.
For additional information on what small businesses need to know about healthcare reform, visit BusinessUSA, which contains resources about new insurance options and other healthcare changes for employers.