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How the ACA Affects Small Business Owners and their Employees

Small business owners have been struggling to understand what the Affordable Care Act requires of them. It’s not easy to make sense of what seems to be a moving target.

The debate continues to rage on in D.C. over the ACA mandates concerning small businesses. Deadlines have been pushed back. Employers remain unsure if they have to provide insurance for workers, and if so what sort of benefits that coverage actually has to include. The cost of compliance is also on everyone’s mind.

Here’s what you need to know now:

  • A small business with 50 or fewer full time employees (FTE) is not required to provide health insurance coverage to employees
  • Companies with 50 to 99 FTEs have until 2016 to comply with the ACA.
  • Companies with more than 100 FTEs will need to provide coverage for largely all of their employees in 2015.
  • A small business owner who does offer coverage to employees can qualify for the Small Business Health Care Tax Credit, which may cover 50% or more of fulltime workers premiums.
  • If your business is close to the 50 FTE limit, or over, talk with your tax advisor to understand the new mandatory tax reporting you’ll need to do in 2015.

Do I need to provide an ACA approved health plan?

The type of plan that an insurer must provide to small business owners is still under discussion. As of now, officially, if you do offer coverage, the health care plan your insurer provides must include a set of defined services known as the Essential Health Benefits.

However, the Employee Health Care Protection Act, a piece of legislation that is currently under consideration, would allow insurers to offer small business health plans that don’t offer the Essential Health Benefits, at least until 2018. We will update this page as more information becomes available.

Where do I purchase insurance?

You can obtain insurance through an independent broker or agent, an insurance company or the ACA Small Business Health Options Program (SHOP).

SHOP is an online marketplace where employers can choose a health plan to provide to their employees. SHOP was intended to allow employers to set cost and other parameters and then allow employees to choose their own plan. Currently that feature is only available in a limited number of state run SHOP exchanges.

Employers with up to 50 fulltime employees have access to SHOP starting November 1, 2014. In November 2015, small businesses with more than 50 but less than 101 fulltime employees will be able to access SHOP.  Unlike the ACA individual Marketplace, businesses can sign up and begin offering coverage any time during the year.

Do I qualify for the tax credit?

SHOP is also the place to apply for the small business health care tax credit which may cover up to 50% of premium costs. The credit can sometimes be applied retroactively, back to 2010 when the ACA was enacted.

Starting in 2014, small employers can claim the Small Business Health Care Tax Credit only for coverage purchased through the SHOP Marketplace.

Some financial experts are advising small business owners to verify if they qualify for a small business health care tax credit first. If so, to claim the credit you’ll need to purchase a plan through SHOP. If you don’t qualify for a credit, price plans from multiple brokers and compare to the SHOP plans.

Do SHOP Medical Plans Cover Dental Care and Vision Services?

Most medical plans in SHOP – as well as those in the individual Marketplace - do not include dental and vision benefits. To offer these important health services to employees, small business owners will typically need to purchase an additional standalone plan.

For many companies, group dental insurance is often too expensive to offer.  Small businesses struggled just to afford basic health care policies. On average, small businesses will pay about 18% more than a larger business for the same health coverage, according to the Council of Economic Advisers. 83% of small business owners are currently uninsured.

Group Dental Plans: The Affordable Alternative to Group Dental Insurance

Dental savings plans for groups offer an affordable alternative to group dental insurance. Similar to a membership buyers’ club, dental saving plan members pay a low annual fee to gain access to a network of participating dentists.

The dentists who participate in a particular plan have agreed to accept a reduced fee – up to 60% less than the customary cost - from plan members. Services include annual cleanings, x-rays, crowns, root canals, and bridges. Some plans even include cosmetic and orthodontic procedures, which are not typically covered by insurance. 

:Dental Plans offers innovative turnkey solutions that allows small businesses to offer their employees excellent dental care options. And group dental plans are exceptionally easy to manage; there are no claims to file and no annual limits to track.

Get the details on :Dental Plans offerings for small business.

 

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