With all of the recent talk about the "Patient Protection and Affordable Care Act of 2010," also known as "Obamacare," it is sometimes difficult to weed through the rhetoric, opinions and politics to get to the key facts. Healthcare changes will affect all of us, so it is important to be armed with the correct basic information. Over the course of the next few months, we will provide you with key updates in a straightforward and simple format. First, let's review the facts up to this point.
When does Obamacare start?
Beginning in 2014, everyone must purchase private health insurance or pay a tax. This has been the most hotly debated mandate from the act. Key dates through January 1, 2014 include:
- October 1, 2013 - Open enrollment for Obamacare starts for the health insurance exchanges. Any individual, family or business (with fewer than 50 employees) can begin comparing plans. All plans will offer the 10 Essential Health Benefits (see FAQs below). There are four categories of plan (Bronze, Gold, Silver, and Platinum), which are arranged by how much they cost for the amount of coverage they provide.
- December 15, 2013 - Submit your first premium payment by December 15, so coverage can begin when the New Year starts.
- January 1, 2014 - Health insurance coverage bought through the exchanges begins. Insurance companies can no longer deny coverage to anyone with pre-existing conditions. Small businesses (50 employees or less) may receive tax credits to cover up to 50% of their total employee premium payments.
The entire program has deadlines running to 2020. For more details, see
What do small businesses need to know?
Small businesses may get health coverage in the Small Business Health Options Program (SHOP) Marketplace.
Starting in 2014, businesses with 50 or fewer full-time equivalent (FTE) employees can use SHOP to offer coverage to their employees. This applies to non-profit organizations as well. With SHOP, businesses control the coverage they offer and how much they pay toward premium costs.
Health coverage through SHOP starts as soon as January 1, 2014. Open enrollment begins October 1, 2013. Employers can begin offering coverage at any time during the year and employees are able to sign up at any time during the year.
Small Businesses have health coverage rights
Commencing in 2014, insurance plans:
- Cannot deny coverage based on the health status of employees or their dependents, even if they have pre-existing conditions
- Cannot charge higher premiums for women, or increase a group's premium for employees with high medical costs
These rights do not apply to grandfathered plans. Contact the California State Department of Insurance (http://www.insurance.ca.gov/) to learn more about your rights.
Small businesses may qualify for tax credits if they offer coverage through SHOP
If a company has fewer than 25 full-time equivalent employees making an average of $50,000 a year or less, the company may qualify for a small business healthcare tax credit.
What about businesses with 50 or more employees?
- Starting in 2014, the tax credit is worth up to 50% of a company's contribution toward employee premium costs (up to 35% for tax-exempt employers)
- Beginning in 2014, the small business healthcare tax credit is available only if coverage is provided via SHOP
If a business has 50 or more employees, they are considered a "large business" under the healthcare law. Several important parts of the law apply to them.
Most large employers can't use the SHOP Marketplace
Generally, companies with more than 50 full-time equivalent (FTE) employees won't be able to use the SHOP Marketplace to offer health insurance to their employees.
Beginning in 2015, employers with 50 or more full-time/full-time equivalent employees that do not offer affordable health insurance that provides minimum value to their full-time employees (and dependents) may be required to pay an assessment if at least one of their full-time employees is certified to receive a premium tax credit in an individual health insurance Marketplace. See FAQs for more information on the assessment.
Starting in 2016, all SHOP plans will be open to employers with up to 100 FTEs.
More about large businesses and the healthcare law
Several other parts of the law apply to businesses with 50 or more employees. Visit the Small Business Administration's website (http://www.sba.gov/content/employers-with-50-or-more-employees) to learn more.
Frequently Asked Questions
See our web page of Frequently Asked Questions for answers to questions such as:
- If someone chooses to forgo health insurance, what is the tax they will pay?
- Health Insurance Exchanges- What are they?
- What benefits will the exchanges provide to consumers?
- What is the Small Business Health Options Program (SHOP) Marketplace?
If you have questions that you would like answered in the next installment, please email them to email@example.com.