Small businesses have expressed concerns about the impacts of new reforms and requirementstaking effect in 2013 and 2014 under the Affordable Care Act. Is your small business ready for potential changes to your benefits? Employers with fewer than 25 employees will want to familiarize themselves with a few changes:
Employers with fewer than 25 employees will want to familiarize themselves with a few changes:
1. Small Business Health Options Program (SHOP)
Under the Affordable Care Act (ACA) businesses with up to 50 employees (in some cases up to 100) will have access to a new health care insurance marketplace beginning in 2014. The Small Business Health Options Program (SHOP) offers small employers increased purchasing power and lowered costs by pooling the risks of many businesses. By completing the online application (available at www.healthcare.gov) you can compare plan prices and coverage options. Enrollment starts on Nov. 1, 2013.
Employers are not required to use SHOP. There is no penalty. However, if the employer does not use the SHOP they won’t be eligible to receive the small business tax credit (only available in the SHOP for up to two years beginning 2014). Depending on the state you are in, you may need 70 percent of your employees enrolled in order to participate. If the employer cannot achieve the contribution or participation minimums, he can enroll his group during a special open enrollment period of 11/15 – 12/15 and cannot be denied getting into the SHOP.
2. Small Business Health Care Tax Credits
This tax credit that took effect in 2010 gave businesses with fewer than 25 full-time equivalent employees a small business tax credit of up to 35 percent to offset costs of insurance coverage. Next year in 2014 this credit increases to 50 percent for qualified businesses participating in SHOP. This credit can be claimed for any two consecutive years.
3. Using SHOP
You can enroll in SHOP beginning Nov. 1 for coverage starting as soon as January 1, 2014. You will select from different plan options (which may be limited in 2014) by comparing price and coverage side-by-side. Choose your preferred plan and how much you want to contribute toward employee coverage.
You won’t be able to use SHOP, but can get coverage through the Health Insurance Marketplace.
5. Notifying your Employees
You must notify your new employees about their health care options including the new Health Insurance Marketplace. New hires need to be notified within 14 days after hire. If you choose to participate in SHOP make sure to communicate to your employees the benefits you offer.