What Every Business Needs To Know About Obamacare in 2014

Obamacare 101 What your SMB needs to know Starting January 1, 2014, every company will need to make sure they are in compliance with the Obamacare laws and regulations. How will this affect your small business? What is Obamacare? Named the Affordable Care Act and it includes two pieces of legislation: Patient Protection and Healthcare and Education Affordable Care Act Reconciliation Act of 2010 Obamacare makes health insurance companies more accountable, lowers health care costs, expands coverage, guarantees more choices, and increases the quality of care for all Americans. 80% medical care 20% overhead cost Law requires insurers to spend at least 80% of your premium dollars on medical care and only 20% on overhead costs. If more than 20% is spent on overhead costs then the insurance companies have to send rebate checks to clients. Rebates for 2012 equaled 66 $500,000,000 ww Obamacare in the news Vol. 20 Issue 9 January 2014 October Oetober November 01 30 As of October 31, only 26,000 people had been able to purchase health insurance through the site. As of November 30, 137,204 people had purchased health When the site launched on October 1, the majority of applicants were unable to enroll. insurance. The government performed little pretesting before the site went live, causing The site is successfully accepting applicants and to date, about 365,000 people have signed up for private insurance. Government technicians are now working around the clock to fix all remaining bugs and glitches. significant issues that may have been preventable. Effects on Businesses Requires most employers to provide healthcare coverage for their employees or pay a surtax on the employee's wage up to 8%. or If you are self-employed with no employees then you are not considered an employer, and are eligible for coverage through the (Small Business Health Options Program) Marketplace If you own a company and hire employees that fill out W-2's then you are considered an employer and can get coverage through the Marketplace. Lowers companies' health insurance premiums by up to 4% for small businesses and 3% for large businesses. Estimates indicate that reform could save businesses $2,000 per person in health costs. $2,000 Relation to SMB Businesses with 50 or fewer full-time equivalent (FTE) employees can use the SHOP to offer coverage to their employees. 000000700 00000 Employers of this size do not face a penalty for not offering health coverage. Insurance companies cannot turn your company down based on the health status of your employees or their dependents, even if they have pre-existing conditions. Insurance companies cannot charge your company higher premiums for women, or increase your group's premium for employees with high medical costs. If a company has fewer than 25 FTE employees making an average of about $50,000 a year or less, they may qualify for a small business health care tax credit. small 360,000 businesses received a tax credit in 2011 to help them pay for health insurance for an estimated 2 million workers. EMERGENCY SHOP (Small Business Health Options Program) Starting in 2014, this new competitive insurance marketplace will allow small businesses to buy affordable and qualified health benefit plans. Allows small companies to compare plan options and decide what they will pay toward employee premiums. 70% Companies must offer coverage to all of their FTE employees; for most states, at least 70% of these employees must enroll in the SHOP plan. Companies that provide coverage through SHOP may qualify for a tax credit up to 50% of the contribution toward employee premium costs (up to 35% for tax-exempt employers). 50% Healthcare Mandates Employer Shared Responsibility payments exist for companies that employ more than 50 employees and do not offer minimum required coverage. $2,000 $3,000 If the company does not provide coverage, the annual payment is $2,000 per FTE employee (after the first 30 employees). If coverage is offered but does not meet the minimum requirements then the annual payment is $3,000 per FTE employee who qualifies for premium savings in the Marketplace. JAN '14 JAN '15 31 Employers generally must be in compliance with coverage requirements by 1/1/2014 Employers have to report employee coverage information to the IRS by 1/31/2015 Employer Shared Responsibility payments are not tax deductable. Foreign companies with at least 50 FTE employees performing work in the U.S. with U.S.-source compensation are subject to the law as well. Conclusion Obamacare helps small businesses offer employees medical coverage, which will help them compete. with larger companies when trying to get quality employees. It saves companies money, increases the number of insured Americans, and provides small businesses support systems and tax credits. Sources: upcounsel www.whitehouse.gov/share/obamacare-three-words-saving-people-money en.wikipedia.org/wiki/Affordable_Health_Care_for America Act www.healthcare.gov/whatif-im-self-employed/ www.medicaid.gov/AffordableCareAct/Timeline/Timeline.html www.whitehouse.gov/healthreform/myths-and-facts www.healthcare.gov/whatis-the-employer-shared-responsibility-payment/ www.healthcare.gov/whatis-the-shop-marketplace/#state=georgia www.nahu.org/meetings/capitol/2013/attendees/jumpdrive/Employer_ACA_Reference_Deck_02_14_2013.pdf america.aljazeera.com/watch/shows/the-stream/the-stream-multimedia/2013/10/3/the-pros-and-consoftheaffordablecareactinfographic.html obamacarefacts.com/obamacare-employer-mandate.php ...............