Q: I own a small business. Will I have to buy insurance for my employees? What help can I get now?
A: It depends on the size of your business. Companies with 49 or fewer employees (part-time employees are included in the calculation) won't be penalized by the Internal Revenue Service if they don't offer health insurance.
In 2015, businesses with 100 or more employees must offer health insurance to at least 70% of their full-time employees. These employers must pay a fee of up to $2,000 per full-time employee if any of their employees get government-subsidized coverage through Your Health Idaho. The first 30 employees will be excluded from the assessment.
In 2016, all business with 50 or more employees must offer health insurance to at least 95% of their full-time employees, and will face a fee of up to $2,000 per full-time employee if any of their employees get government-subsidized coverage through Your Health Idaho. The first 30 employees will be excluded from the assessment.
Businesses can now get tax credits if they have 25 or fewer employees and a workforce with an average wage of up to $50,000. Tax credits of 35 percent of the premium costs are available for tax year 2013 and will increase up to 50 percent for 2014.
Because the penalty (“employer shared responsibility payment”) is imposed by the IRS and is based on complicated calculations, employers should not rely on this basic information but are strongly encouraged to consult with their legal and tax advisors.
Q: What is the small business tax credit and how do I know if I'm eligible?
A: Effective Jan. 1, 2010, tax credits are available to qualified small businesses that provide their employees with health insurance. To qualify, your business must cover 50 percent of the cost of health care coverage for your employees, pay an average annual wage below $50,000, and have fewer than the equivalent of 25 full-time employees. The size of the credit depends on your average wages and the number of employees you have.
Q: I have five employees. Will I be required to provide insurance for my employees?
A: No. The employer responsibilities under the health reform law do not apply to employers with fewer than 50 employees. However, beginning in 2014, you will be able to enroll your employees in coverage through Your Health Idaho, or directly through the carrier, using an agent or broker if desired. If you want to claim the small business tax credit, you will need to go through Your Health Idaho.
Q: I have 75 employees. Will I be required to provide insurance for my employees?
A: An employer that does not offer minimum essential coverage to its employees will be subject to a penalty of $2,000 for each of their employees beyond the first 30. In your case, this penalty would be $2,000 x (75-30) = $90,000. If an employee’s share of the premium for coverage provided by an employer exceeds 9.5% of his or her household income, employers that do offer minimum essential coverage will be assessed a penalty of $3,000 per employee that receives a subsidy through Your Health Idaho. This penalty may not exceed $2,000 times the number of employees beyond the first 30. Since you employ between 50 and 99 full-time workers, 2016 is the first year this penalty would be applicable.
Q: I am self-employed. Will the new law impact my health insurance choices?
A:Yes. Beginning January 1, 2014, self-employed individuals and their families will have the option of purchasing coverage through the Your Health Idaho individual market. This will increase plan choices and include the self-employed in a more stable pool. To find out more about options available through Your Health Idaho, visit www.yourhealthidaho.org.
Q: Will I be required to drop my current coverage?
A: No. Group health plans in effect as of March 23, 2010, are grandfathered under the law and will be considered “qualified coverage” that meets the mandate to have health insurance that begins January 2014. Employees and dependents can be added to the policy without losing grandfather status. In addition, if a non-grandfathered small employer group plan was in effect on October 1, 2013, your insurer may allow you the option of renewing the current plan one time prior to October 1, 2014.
Q: Must I go to Your Health Idaho to purchase insurance, or can I continue to purchase coverage through my insurance agent?
A: Your insurance agent may be able to assist you in purchasing coverage for your employees through Your Health Idaho. Or, if you prefer, you can purchase a small group health plan outside of Your Health Idaho using an agent or broker.
Q: Can I continue to provide assistance to my employees through flexible spending accounts?
A: Yes, nothing in the ACA would eliminate or discourage these options.