Whether you like it or not, your business will be affected by Obamacare starting January 1, 2015. With steeper fines and strict, albeit sometimes confusing, guidelines to follow, we are here to help! While most of these rules/regulations are self-explanatory, it is important to do research for yourself for complete security. Check out the IRS website for more detailed information.
- The businesses affected must have 100+ full-time (or equivalent) employees. These businesses are required to provide health benefits to at least 70 % of their employees* (which will rise to 95% by the next year). *A $2000 annual penalty per employee will be issued if requirements are not met.
- Businesses with 50 to 99 employees have until 2016 to comply with Obamacare guidelines; those with less than 50 employees do not have to provide health coverage to employees.
- What is an “equivalent” full-time employee? An employee that works more than 30 hours per week, consistently. Be careful with this one. Technically, under the law, two half-time employees equal one full-time employee. Having several part-time employees can make the numbers complicated so check the IRS website for specific information.
- There are tax credits available for businesses that have less than 25 full time equivalent employees that pay below $50K in average annual wages and cover up to half of the premium cost for their employees’ health insurance. This credit of up to 50% of employer-paid premiums is available for two back-to-back tax years.
- Larger companies can help to reduce the number of qualified employees by requiring lower-wage workers to apply for Medicaid; those that qualify and accept Medicaid are not required to be covered by employers.
- Go to https://www.healthcare.gov/ to see where to shop for insurance plans and find out what your state requires you to use, a shop or the federal website.
- While individual plans have a March 2015 mandate, businesses were required to have coverage plans in place by December 15, 2014 to have applied coverage on January 1, 2015. Penalties will ensue for those businesses that have failed to cover requirements.
While Obamacare can be very confusing, you don’t want to be stuck with fines and penalties because of ignorance. Even though it is too late to cover for 2015, the guidelines are so important for every small business to know now and in the future. Stay abreast of the situation by checking healthcare news and updates on the IRS website regularly.