What Small Business Owners Need to Know About ACA

on February 7, 2016

There is a significant amount of information that has been written about the Affordable Care Act (ACA), one of the largest pieces of federal health care legislation ever implemented. What you, as a small employer, need to know can be boiled down to:

  • Your responsibilities under the law
  • Your responsibilities to your employees

Your Responsibilities Under the Law: ACA Employer Mandate

  • As of October 1, 2013, there is a communication requirement for employers. It is a notice requirement stating that employers must communicate annually about the ACA and coverage options to their employees. The communication applies to:
  • Businesses covered by the Federal Labor Standards Act (FLSA) that have at least two employees, and have an annual dollar volume of sales or business revenue of at least $500,000, or
  • Are hospitals, businesses providing medical or nursing care for residents, schools and preschools or government agencies.

If you fall under one of these two categories, you are required to provide an annual communication to your employees:

Click here for sample communication if providing health insurance to your employees

Click here for sample communication if not providing health insurance to your employees

  • If you have 50 or more full time employees, you are required to provide health insurance that meets the minimum essential coverage requirements of the law or pay a penalty.

Click here to see the Kaiser Family Foundation penalty chart

  • There are also some reporting requirements that go along with providing health insurance to employees:
  • If your health plan is fully insured, you are required to report a breakdown of costs between medical claims and administrative overhead.
  • You are required to provide a notice to your employees as a supplement to your summary plan description.

If you are interested in learning more about the Affordable Care Act, the Kaiser Foundation has put together a summary.

Click here to see the Kaiser Family Foundation ACA summary

Your Responsibilities to Your Employees

  • Even though you may not offer health insurance to your employees, they still need to purchase it. Starting in 2014, health care reform requires everyone to obtain minimum essential coverage for themselves (and their dependents) or pay a penalty.

Click here to see the Kaiser Family Foundation penalty chart

  • Your employees need help understanding their responsibilities. As a caring employer, you can provide information to your employees on their legal requirements, premiums and subsidies that may be available and where they can go to learn more.

Click here to see the Kaiser Family Foundation brief about health subsidies

  • Help your employees test their understanding of how the premium credit works with their taxes by directing them to this quiz on the Kaiser Foundation website:

Click here to complete the quiz

  • Offer your employees an opportunity to participate in voluntary benefits. These benefits can provide additional coverage and plug the growing coverage gaps in their health insurance plans. Voluntary benefits can help employees pay for out-of-pocket expenses and deductibles not covered by their health insurance plans.

Click here to learn more about voluntary benefit plans