Employers with 1-24 Employees
Implementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014. Some of the provisions that may impact employers with fewer than 25 employees include:
Small Business Health Care Tax Credits
These credits have been specifically put in place to help small business employers (employers with less than 25 employees) afford the cost of health care coverage for their employees. This provision targets employers with low and moderate-income workers. The credit is designed to encourage small businesses to begin offering health insurance or maintain insurance coverage they already have. Since 2010 business that met the following criteria were likely to receive up to a 35% credit to offset the cost of insurance.
|Fewer than 25 full-time employees;
Whose average annual wages are below $50,000;
That contribute 50% or more toward employees’ health insurance premiums
In 2014, the 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.
For questions about wages and intended purposes for this credit please see the IRS Q&A release. To check your eligibility and how much you may be eligible to receive see the Small Business Health Care Credit Estimator.
Small Business Health Options Program (SHOP)
Starting January 2014, businesses with up to 50 employees will have access to a new health care insurance marketplace through the Small Business Health Options Program (SHOP). Small businesses pay on average 18% more than big businesses. You’ve probably heard that the marketplace will allow small business owners increased purchasing power. This is true as it allows small employers to pool their risks and obtain a better choice of high-quality coverage at a lower cost. To enroll, eligible employers must have an office within the service area of the SHOP and offer SHOP coverage to all full-time employees.
In 2016, employers with up to 100 full time employees will be allowed to participate in SHOP. Employers with 50 or fewer employees interested in the SHOP Marketplace can call 1-800-706-7893 (TTY users: 1-800-706-7915) from Monday through Friday, 9 a.m. to 5 p.m. EST.
Based on this information the new reforms will benefit my business. I own a small firm; less than 10 employees.
How has this change affected your small business?