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5 Things Every Small Business Owner Should Know about the Affordable Care Act

By Pramod Raheja   |    November 20, 2013   |    9:38 AM

In advance of our Affordable Care Act Lunch & Learn talks next week, we wanted to provide you with the essential information every small business owner should know about the ACA. Here are 5 things to consider:

1. Businesses with 50 or fewer full-time employees are not required to offer health insurance coverage.

However, in 2015, once your business reaches 50 full-time equivalent employees, a penalty will kick in if you fail to provide coverage for employees who average 30 or more hours a week in a given month. This is called the “employer mandate.” The penalty is $2,000 for each full-time employee in excess of 30 full-time employees.

Small businesses with fewer than 25 full-time equivalent employees with average annual wages below $50,000 can receive tax credits to contribute towards payment for employee premiums.

2. The Small Business Health Options Program (SHOP) is part of the health insurancemarketplace where small businesses with fewer than 50 full-time equivalent employees can shop for group health plans. In 2016, those with 100 full-timers or less can use the SHOP.

3. Small business owners have to provide so-called "minimum essential" and "affordable" coverage. “Minimum essential” coverage means covering 60% of the actuarial value of the cost of the benefits.‘”Affordable” signifies that the premium for the coverage of the individual employee cannot exceed 9.5% of the employee's household income.

4. The effect of the ACA on sole-proprietors and those with no employees will be much like the effect on individuals. For these people, the crux of the 2014 rollout is the individual mandate, which requires that all U.S. citizens and legal residents to have health coverage or pay a penalty. As a one-person business, you buy insurance through your state's benefits exchange, which will roll out in 2014.

5. Here’s the truth about the ACA: only a tiny fraction of small businesses face the new rules, and even fewer face any changes. Of the country's 6.5 million workplaces, only 1% must actually start providing insurance next year. According to government data, 96% of businesses with 50-plus workers already offer health plans. Remember: the employer mandate pertains only to businesses with 50 or more employees. As of 2010, there were roughly 5.7 million small employers (“small employer” is defined as a business with fewer than 500 workers), and 97% of these small employers have fewer than 50 employees. Therefore, the employer mandate applies only to 3% of America's small businesses, or about 200,000 companies nationwide.

IO Affordable Care Act Lunch & Learn: There will be 3 sessions, so if you can't make it at your home location, you're invited to register at any of the other two. Lunch will be provided! Space is limited for this hot topic, so register today.

TUES NOV 12, 2013 - Arlington Location - 1100 N. Glebe Road #1010 Arlington VA 22201

WED NOV 13, 2013 - Reston Location - 1900 Campus Commons Drive #100 Reston VA 20191

THUR NOV 14, 2013 - Tysons Corner Location - 1934 Old Gallows Road #350 Tysons Corner, VA 22182

Sign up for Intelligent Offices’ Affordable Care Act Lunch & Learn by clicking here.