What are the basic requirements for providing health insurance to my employees?
If you have fewer than 50 full-time or full-time equivalent employees, you are NOT required to provide health insurance. If you have 50 employees or full time equivalent employees, you are required to provide insurance that is affordable and has the coverage required by the ACA.
What is “affordable” insurance?
The ACA defines insurance as “affordable” when the employee’s contribution for single coverage is not more than 9.5% of the employee’s salary.
What are some of the major coverage requirements?
- No denial of coverage for pre-existing conditions
- No lifetime limits on coverage
- No co-pay for preventative services
- No longer than 90-day waiting period for coverage
- Mental health and substance abuse disorder treatments
What defines a full-time employee?
An employee who regularly works 30 hours or more per week is defined as full-time. The ACA also states that a combination of full and part-time employees can result in 50 full-time equivalent employees for purposes of meeting the requirement to provide health insurance.
What is the employer penalty for not providing health insurance?
The full penalty will be $2000 for each full-time employee (minus 30) employed during the year. The penalty will be triggered if one of a company’s employees applies for and receives a tax credit for insurance premiums payments through a Health Exchange. The Internal Revenue Service will be responsible for collecting the penalty.
Can an employer purchase group insurance through the Insurance Exchange?
The Insurance Exchange does include a Small Business Health Program (SHOP) where employers with fewer that 50 employees can purchase group insurance.
Can an employer receive tax credits for providing insurance to employees?
Companies with fewer than 25 employees who pay average annual wages under $50,000 and pay at least 50% of the premium for single coverage may qualify for a small business tax credit to offset the cost of providing the insurance.
Can my spouse or dependents purchase insurance from the Exchange even if I am covered by my employer-provided insurance?
Yes, anyone may purchase insurance through the Exchange, but only those with an income between 100% to 400% of the Federal Poverty Level may qualify for tax credits to help pay the premiums. (Will the Feds require you to take family coverage if it is offered by your employer? Also, what income will be the basis for the tax credit?)