So you went ahead and started your own business? Be on the lookout for this series as we discuss some of the milestone facets. As for this blog, we will focus on healthcare for businesses under Obamacare.
THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA)
Formally, the Patient Protection and Affordable Care Act (PPACA), better known as Obamacare, is a federal statute President Obama signed into law back in March of 2010. This law has been under considerable scrutiny and remains hotly contested as to whether it will remain a law. Nonetheless, under Obamacare, public and private insurance coverage expanded in order to increase the affordability of health insurance; insurance companies were (still are) required to cover all applicants within the act’s new minimum standards as well as offer the same insurance rates regardless of any pre-existing conditions or sex. Corporate entities and individuals alike are affected by this law.
EMPLOYER MANDATE / EMPLOYER PENALTY
Under Obamacare, the Employer Mandate / Employer Penalty requires that firms with “100 or more full-time equivalent employees (FTE) need to insure at least 70% of their full-time workers by 2015 and 95% by 2016.” Those businesses with 50-99 full time employees are required to start insuring the full-time workers by 2016. If you have a business with less than 50 employees, then the Employer Mandates does not apply to you. Originally, the Employer Mandate was set to begin in 2014, but has since been delayed to 2015/2016.
What if you are a firm that has 50 full-time employees or more, but don’t want to offer health insurance? In that scenario, the employer will be required by the IRS to make a per-employee, per-month “Employer Shared Responsibility Payment.” Generally, this payment is an annual fee of $2,000 per employee if insurance isn’t offered at all; however, the first 30 full-time employees are exempt. It is possible that the employer will be required to pay $3,000 per employee if the employer received what’s known as “marketplace cost assistance.”
Naturally, these provisions are not as straightforward as it seems. Read through Obamacare Facts for a more in-depth explanation of the nuances that might affect your business. This blog entry is here to provide an introduction so you are not blindsided with a notice by the IRS that you now owe many thousands of dollars because you unknowingly refused to offer health insurance to your employees.
For those businesses with fewer than 25 employees, visit the U.S. Small Business Administration to read about key provisions under Obamacare that affect your business specifically.
HEALTHCARE LAW PRACTICES
VLF does not specifically practice in the area of healthcare law, but because small businesses and entrepreneurs are within our repertoire, it is important to communicate those areas that might be tangential to our practice, but are important to yours. If you need a specialist in this area, we can certainly make some referrals.