As an employer, you’re undoubtedly curious about how the Affordable Care Act impacts your obligation to provide health insurance to your employees.
Often abbreviated ACA, the full title of this important health care legislation is the Patient Protection and Affordable Care Act, or PPACA. Because President Barack Obama spearheaded the initiative, it is sometimes referred to as Obamacare. The PPACA was signed into law on March 23, 2010.
If you have fewer than 50 full-time and full-time equivalent employees, you have no obligation to offer health insurance coverage for those employees. Of course, you can still provide your employees coverage if you wish, but you have no responsibility to do so. Under the ACA, the federal government considers employers with 50 or more employees Applicable Large Employers and requires them to provide coverage or pay penalties.
If you would like to provide coverage as a small employer, ask your broker or potential health carrier about some of the tax benefits that could be available to you.
The Employer Mandate/Employer Penalty, originally scheduled to start in 2014, was delayed until 2015/2016. Its enactment meant businesses with 50 or more full-time and full-time equivalent employees were to provide affordable health insurance to at least 95 percent of their full-time employees and dependents up to age 26 or pay a penalty fee.
The Internal Revenue Service answers questions about Applicable Large Employer responsibilities under the ACA.
If you employ fewer than 50 people as full-time or full-time equivalent employees and you offer your employees health care coverage, even though the ACA does not require you to, you do not have to offer dependent coverage. In fact, it may be to your employees’ benefit to not offer dependent coverage because it may allow dependents to qualify for tax subsidies toward coverage they purchase in the health care Marketplace.
If you employ 50 or more, you are required to provide coverage options for dependents under the rules outlined in the ACA. The penalty for not offering health coverage to your eligible employees’ dependents is the same as for failing to offer affordable coverage to your employees.
Employers who provide health care coverage to their employees must offer plans that include what the ACA calls Essential Health Benefits (EHB). For 2017, new benefits were added to the EHB package, including chiropractic, infertility, and bariatric services, and eyeglasses for children up to age 19.
The health insurance landscape is always changing. Federal legislation to repeal and replace the ACA is under discussion, but it is too early to speculate about how it may affect your business.
Part 5 of this group health insurance series explores what’s ahead in 2018.
Questions? Give our Employer Group team a call at 800-453-2981, option 3.
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