The Affordable Care Act and Less than 50 Employees

As a healthcare consulting firm, Axiom Health Care Marketing wants to provide you with information that can prove beneficial to your business. We hope that you find the following information helpful as you deal with health insurance companies and the requirements of the Affordable Care Act.

The Patient Protection and Affordable Care Act (PPACA) is an historic piece of legislation. It is the first major change in the United States health care system since 1965, when Medicare and Medicaid were implemented. Whether or not you agree with the changes created by the law, better known as Obmacare, or simply the Affordable Care Act, you will be affected if you live in the U.S., whether you like it or not. If you run a small business with less than 50 employees, there are factors you should know.

Purpose of the PPACA

Most people know, in short, that the PPACA was put in place so that every American would have health insurance. The basic reason for this is to take a large burden off the federal and state governments by requiring that the public provide their own health insurance. Those that have not had health insurance have been a tremendous financial burden on the states and the federal government through Medicaid and other government-subsidized programs when they need medical care. These programs were never meant as a substitute for a person’s own healthcare coverage.

Since the passage of the Emergency Medical Treatment and Active Labor Act in 1986, any hospital that accepts payments under the Medicare and Medicaid programs, virtually all, are required to provide emergency services regardless of a person’s citizenship, legal status or ability to pay. The cost of treating these people has fallen on the government.

Requiring people to provide their own insurance takes much of the burden off the government. In return for being required to furnish their own health insurance, the public is guaranteed reasonable rates, acceptance regardless of pre-existing conditions, and a specific standard of care. Those who cannot afford insurance will receive subsidies; including some businesses. Even with the subsidies, it is believed that state and federal governments will save considerably by reducing expenses normally paid by government programs.

How Many Employees Do You Have?

How the Affordable Care Act affects your business depends a lot on the number of employees you have.

Businesses that employ fewer than 25 – 49 full time or full time equivalent (EFT), people are exempt from the requirement to provide health insurance to their employees. Full time is considered 30+ hours. Two part time employees working 15 hours each would be considered one full time equivalent.

Having started back in 2010, companies with fewer than 25 employees that pay for a major part of their employee’s premiums have received a tax credit of up to 35% of the premiums. That tax credit could be as much as 50% in 2014 if you arrange your insurance through one of the insurance exchanges. These tax credits do not apply if you are self-employed, so you may want to incorporate or become an LLC.

Another requirement that businesses of less than 50 employees avoid is the requirement to show the value of their health care on employees’ W-2 forms.

What is the Insurance Exchange?

If you want to provide health insurance for your employees, there is the Small Business Health Options Programs, or simply SHOP Exchanges. If you do provide insurance, you will be eligible for the tax credit. The amount of the credit will be contingent on such things as how many employees you have and their salary, on average.

Purchasing insurance through SHOP may be cheaper than you have paid in the past. Small businesses can pool together in the exchanges and negotiate group coverage.

As a medical marketing firm, we endeavor to supply medical businesses with the help they need with their marketing. We specialize in Internet marketing specifically for healthcare providers. Axiom Health Care Marketing can provide you with myriad healthcare marketing strategies that will have your practice sitting squarely on the first page of search results.

Published by Axiom Health Care Marketing