Is my business required to offer health insurance to my employees?

No. Under the Affordable Care Act, a Small Business (less than 50 full-time equivilent employees) will not be charged any penalties for not offering health insurance. But some Small Businesses might qualify for a Small Business Tax Credit if they do.

Since you aren't required to offer group health insurance, you have choices. You can either offer your employees group health through the Private Exchange or you can give employees access to purchase their own plans through the Individual and Family Private Exchange. 

What is the Individual and Family Private Exchange? How can that help my employees?

The Individual and Family Private Exchange is an online marketplace where your employees could enroll in private coverage for themsevles or their family. 

No health insurance company can turn them down or charge them extra premium because of pre-existing conditions, gender or how often they use their plan. Pre-exisiting conditions and pregancy are always covered. 

And they might qualify for lower rates based on household income. If their household income is less than 400% Federal Poverty Level (about $98,000 per year for a family of four), then they will qualify for some level of tax subsidy to be used to lower their Individual or Family health insurance premium and out-of-pockets costs on things like deductibles and copays. Premiums are on a sliding scale to keep them affordable for everyone based on family size and household income. 

What is considered a full-time equivalent employee?

A full-time equivilent employee is a true employee of your business, generally getting a W-2, who works 30 or more hours per week. 

Why is it important to know how many full-time equivalent employees work for my business?

The Affordable Care Act divides businesses into two categories: Small (less than 50 FTEs) or Large (50 or more FTEs). The compliance rules, pricing, benefits, and how plans are issued form insurance companies is very different for each category. 

Our calculators can determine exactly how many FTEs are employed by your business.  

Do part-time or seasonal workers count toward my number of full-time equivalent employees?

They can partially count toward your total number of FTEs employed by your business. 

Seasonal employees must work 120 or more days per year to be counted. For every 30 hours worked by part-time employees, they collective count as one full-time equivilent employee. For example, if you have two part-time employees who work 15 hours per week each, then together they count as one FTE when you are trying to determine if you are a Small (less than 50 FTEs) or Large (50 or more FTEs) Business under the Health Reform law.

Even though part-time or seasonal employees could count toward your total number of FTEs, you do not have to offer them benefits. 

What is the Small Business Health Care Tax Credit? And do I qualify?

The small business Health Care Tax Credit helps small employers afford the cost of health care coverage for their employees and is specifically targeted for those employers 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 (FTEs), 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. 

The credit is up to 35% to help offset the costs of insurance - issued on a sliding scale based on average employee incomes at your business.  In 2014, this tax credit goes up to 50% and is available to qualified small employers 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.

We can help you determine if you might qualify for a Small Business Health Care Tax Credit and help you secure coverage through the SHOP. 

What is the Small Business Health Options Program (SHOP)?

Starting in 2014, small employers with generally up to 50 employees will have access to the new health care insurance marketplaces through the Small Business Health Options Program (SHOP).  If you qualify for a Small Business Health Care Tax Credit (business less than 25 employees, average income less than $50,000 annually, employer pays 50% of employee premium), then you will only be able to apply that credit when purchasing plans offered through the SHOP.

We can show you SHOP plans and other Small Business plans side-by-side and help you decide which option is best for your business. 

In the past, small businesses might pay about 18% more than big businesses for health insurance because of administrative costs.  SHOP will offer small employers increased purchasing power to obtain a better choice of high-quality coverage at a lower cost.  Costs are lowered because small employers 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.  Plan options, insurance company choices, and doctor/provider networks will likely be more limited on SHOP plans than other Small Business plans.

In 2016, employers with up to 100 employees will be able to participate in SHOP.  

What is the Employer Notification to Employees about New Health Insurance Marketplace

Originally, under the Affordable Care Act, employers 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), were required to provide notification to their employees about the new Health Insurance Marketplace.

It was to inform employees that they may be eligible for a premium tax credit if they purchase coverage through the Marketplace; and advise employees that if they employee purchase a plan through the Marketplace, they may lose the employer contribution (if any) to any health benefits plan offered by the employer. Since then, this is no longer required and considered optional.

Employers could provide this notice to all current employees by October 1, 2013, and to each new employee at the time of hire beginning October 1, 2013, regardless of plan enrollment status (if applicable) or of part-time or full-time status. 

If you would like to provide this optional notificational, we'll be happy to handle that for you. 

Can insurance companies charge us whatever they want?

Under the Affordable Care Act, insurance companies must spend at least 80% of premium dollars on medical care, not administrative costs.  Insurers who do not meet this ratio are required to provide rebates to their policyholders, which is typically an employer who provides a group health plan. 

Employers who receive these premium rebates must determine whether the rebates constitute plan assets.  If treated as a plan asset, employers have discretion to determine a reasonable and fair allocation of the rebate.  

Contact us with any questions regarding your premium rebate.

Are there limits on Flexible Spending Account contributions?

For plan years beginning on or after January 2013, the maximum amount an employee may elect to contribute to health care flexible spending arrangements (FSAs) for any year will be capped at $2500, subject to cost-of-living adjustments. 

Please note that the limit only applies to elective employee contributions and does not extend to employer contributions.  

Are there additional tax withholdings for Medicare? What is the new Medicare Assessment on net investment income?

Beginning January 1, 2013, the Affordable Care Act increased the employee portion of the Medicare Part A Hospital Insurance (HI) withholdings by .9% (from 1.45% to 2.35%) on employees with incomes of over $200,000 for single filers and $250,000 for married joint filers.  If the employee earns less than that income amount, the tax will remain unchanged at 1.45%.

Also beginning January 1, 2013, a 3.8% tax was assessed on net investment income such as taxable capital gains, dividends, rents, royalties, and interest for taxpayers with Modified Adjusted Gross Income (MAGI) over $200,000 for single filers and $250,000 for married joint filers.  

What is the maximum waiting period for new hires to join my group health plan?

Starting January 1, 2014, no full-time equivilent employee will have to wait more than 90 days before being added to your group health insurance plan. 

What is the Transitional Reinsurance Program?

The Transitional Reinsurance Program is a three-year program, beginning in 2014 and continuing until 2016, that reimburses insurers in the individual insurance Marketplaces for high claims costs. 

The program is funded through fees to be paid by employers (for self-insured plans) and insurers (for insured plans).  HHS estimates that the fees for 2014 will be $5.25 a month (or $63 for the year) for each individual covered under a health care plan, with the required fee for the following two years to be somewhat lower.  The fee applies to all employer-sponsored plans providing major medical coverage, including retiree programs.  The U.S. Department of Labor has advised that for self-insured plans, these fees can be paid from plan assets.