What Business Owners Should Know about the Affordable Care Act


Know the difference between being self-employed and an employer. Before applying for coverage, know that if you’re self-employed with no employees, you are not considered an employer. You will have to use the individual marketplace to find coverage. Even if you hire independent contractors, you are not an employer.

Not all employers are required to offer coverage. The HealthCare.gov websites states that employers are not required to offer coverage. However, some larger businesses may have to make a payment in 2015 or 2016 called the Employer Shared Responsibility Payment. If you have less than 50 full-time employees, you do not have to pay the Employer Shared Responsibility.

You might be eligible for a small business tax credit. A tax credit is available to businesses with 25 or fewer full-time-equivalent employees and average wages of $50,000 or less. The credit is worth up to 50% of premium costs. You can still deduct from your taxes the rest of your premium costs not covered by the tax credit. Visit the IRS website to find out more about eligibility.

You might be able to take advantage of the Small Business Health Options Program (SHOP) Marketplace. The Affordable Insurance Exchanges will allow small business owners to offer their employees plans from different insurers, while still receiving one bill and writing one check.

For 2014, the SHOP Marketplace is available to employers with 50 or fewer full-time-equivalent employees (FTEs). In order to qualify as full-time, your employee must work at least 30 hours per week. Employers with fewer than 25 employees may qualify for tax credits if insurance is purchased through SHOP. According to Healthcare.gov, in many states at least 70% of your full-time employees must be enrolled in your SHOP plan. However, if you apply for SHOP coverage between November 15 and December 15 each year, you will be able to enroll without meeting this requirement.

You can offer health insurance coverage to your employees at any time of the year. Healthcare.gov allows small businesses to research and compare their health insurance options in one place. By entering basic information about your business, you’ll see a list of all the insurance options available in your area, broken down by price and coverage options.

You’ll be able to decide how much of your employees’ insurance costs you want to cover. Since small business owners will be joining a larger risk pool, they will be shielded from sudden changes in rates based on the health of a few employees.


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