Affordable care act 101 what t he health care law means for small businesses
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Affordable care act 101 what t he health care law means for small businesses

Affordable Care Act 101:What The Health Care Law Means for Small Businesses

These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers should consult their legal or tax professionals to discuss how these matters relate to their individual business circumstances.

December 2013


Affordable care act 101 what t he health care law means for small businesses

Health Insurance Marketplaces:

Choice and Transparency

The SHOP Marketplace will offer employers:

  • A choice of qualified health plans from different private health insurers

  • Meaningful comparison between plans

  • Choice to work with a broker or independently

  • Coming soon: Option to offer employees a choice among qualified health plans across multiple health insurance companies starting in 2015

  • (The SHOP in some states may offer this option in 2014)

  • Take advantage of enhanced level of Small Business Health Care Tax Credits


Affordable care act 101 what t he health care law means for small businesses

Enrolling in SHOP: Who, When & How

Who’s eligible?

  • Employers with 50 or fewer Full-time Equivalent (FTE) employees

  • Starting in 2016, employers with up to 100 FTEs will be eligible

  • Once an employer enrolls, it can grow and still remain in SHOP

  • When can employers enroll?

  • Get started now

  • Complete by December 23, for coverage that takes effect as early as January 1, 2014

  • Enroll anytime year-round for coverage that takes effect later

  • How can employers enroll?

  • During 2014 only, small businesses 1) Enroll directly through an agent, broker or insurance company and 2) Submit an eligibility form to HHS

  • To compare plans and download the eligibility form, go to www.healthcare.gov


Enrolling in states with a federally facilitated shop

Enrolling in States with a Federally Facilitated SHOP

  • In states using the Federally Facilitated SHOP

    • For 2014: “Direct Enrollment” using agent, broker or insurer

  • For 2015: enroll through agent, broker, insurer or SHOP online

    • States running their own SHOP have their own enrollment processes.

    • Agent, broker, HealthCare.gov or SHOP Employer Call Center can tell you which SHOP Marketplace you use.


Small business health care tax credit

Small Business Health Care Tax Credit

  • In 2010 - 2013, up to 35% of a for-profit employer’s premium contribution

    • Employers can still deduct remainder of contribution

    • Credit can be claimed through 2013

  • Starting in 2014, the credit goes up to 50%

    • To take advantage of the credit, business must buy coverage through one of the new small business health insurance Marketplaces known as SHOP

    • Credit can be claimed for any 2 consecutive taxable years beginning in 2014 (or beginning in a later year) through the SHOP

  • Note that this is a Federal credit, and that some states may also have additional tax credits available


Businesses with 24 or fewer fte employees

Businesses with 24 or Fewer FTE Employees

  • If these smaller businesses provide coverage, they may qualify for the Small Business Health Care Tax Credit to help offset costs:

    • Must have average annual wages below $50,000; and

    • Contribute 50% or more toward employees’ self-only premium costs

      Note: The maximumtaxcreditis available to employers with 10 or fewer full-time equivalent employees and average annual wages of less than $25,000


Affordable care act 101 what t he health care law means for small businesses

Small Business Health Care Tax Credit

Business employs 24 or fewer full-time equivalent employees

Employees’ average annual wages are less than $50,000

  • Business pays for at least 50% of employees’ self-only premium costs

Up to 35% Federal Tax Credit in 2013 and *50% in 2014

if for-profit entity

*SHOP participants only


Small business resources

Small Business Resources


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