Starting in 2015, large companies with 100 or more full-time employees must provide affordable health coverage that meets minimum standards, or pay a fine. This requirement will expand to include midsize firms with 50 to 99 full-time workers in 2016.
Small businesses (with fewer than 50 employees) may be relieved that the employer mandate does not apply to them, but the Affordable Care Act (ACA) will continue to affect the overall health-care landscape and the coverage options.
Small-business owners who want to help workers obtain health insurance for 2015 have several options under the Affordable Care Act. They can renew an existing small-group plan, even if it doesn’t meet the new ACA standards; purchase a new ACA-compliant group health plan; or decline to provide group coverage and encourage workers to buy their own insurance from a state-run individual exchange.
SHOPs Are Open
The Small Business Health Options Program (SHOP) is designed to help simplify the purchase of group health insurance. SHOP is composed of state-based exchanges, and employers must have an office or worksite in a state to use that state’s SHOP. Unlike the individual state exchanges, there is no specific enrollment period.
For 2015, SHOP is available to employers with 50 or fewer full-time employees (generally those working an average of 30 or more hours per week); it expands to employers with 100 or fewer employees in 2016. In order to use SHOP, a business must offer coverage to all full-time employees.
Businesses with fewer than 25 employees may receive a tax credit of up to 50% of premium costs for SHOP plans only, and premium costs that don’t qualify for the tax credit are otherwise tax deductible.
Individual Mandate in Force
Taxpayers without health insurance face a penalty that is rising to the greater of $325 per adult or 2% of household income in 2015. Additional penalties may be incurred for each dependent (up to an annual cap); college students and minors (under age 18) trigger only 50% of the penalty. Altogether, an uninsured family of four earning $100,000 could face an estimated penalty of about $1,588.1
Business owners, the self-employed, and workers without access to workplace plans can buy coverage through the individual Health Insurance Marketplace.