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10 Important Things You Need to Know about Health Care Reform

The Patient Protection and Affordable Care Act was signed into law on March 23, 2010, and the reforms will continue to roll out over the next several years. Many business owners are concerned about how this will affect their company, employees and bottom line. 

Here is an overview of the key elements

Size of your company does matter

The law breaks down small business based on how many employees they have – 24 or fewer, up to 50 and 50 and above. Every business that employs at least 50 full-time employees is considered large for the employer mandate.1

Full-time employee status

The law defines a full-time employee as someone who works an average of 30 hours per week. Part-time employees who work less than 30 hours per week are also counted as partial full-time employee equivalents (FTE). Employers are encouraged to learn what is involved in determining this calculation at HealthCare.gov.2

Shared responsibility requirements (employer mandate) 

Small businesses with 50 or fewer full time employees are exempt from the shared responsibility provision that takes effect Jan. 1, 2015. Employers with more than 50 employees that do not offer health insurance coverage will pay an assessment of $2,000 per full-time worker (excluding first 30) if any of their employees obtains premium tax credits.  Employers are encouraged to learn the complete details regarding the employer mandate at HealthCare.gov.2

Essential health benefits

Broken down into 10 categories of benefits and services, the essential health benefits are required for any insurance plan offered by employers. The benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorders, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services, and pediatric services.2

Grandfathered health plans

If at least one employee was enrolled in a health plan on March 23, 2010, your company's plan may qualify to be grandfathered in and not be subjected to changes. There are several rules attached to this qualification including that plans must cover children up to age 26 and prohibit pre-existing conditions exclusions.3

Simple cafeteria plans

In the law, simple cafeteria plans allow employees to pay their portion of health insurance premiums and other eligible benefits, such as contributions to flexible spending accounts, with pre-tax dollars. Simple cafeteria plans are available for businesses with 100 or fewer employees who meet certain coverage and employer contribution thresholds.3

Small business tax credit

If a small business has 24 or fewer full-time employees whose average annual wage is less than $50,000, it might be eligible for a tax credit for employer-paid health insurance premiums. The credit is largest for employers with 10 or fewer employees whose average compensation does not exceed $25,000.4 

Small Business Health Options Program (SHOP)

SHOP, also known as exchanges, is a new program that simplifies the process of buying health insurance for small businesses. It allows owners to compare price, coverage and quality of plans. For 2014, the SHOP Marketplace will be open to employers with 50 or fewer full-time employees.2 

W-2 reporting changes

Businesses with more than 250 employees must report the aggregate cost of health insurance coverage under an employer-sponsored group health on an employee’s W-2 form. The amount reported should include both the portion paid by the employer and the portion paid by the employee.3


If you're self-employed with no employees, you're not considered an employer. Starting Oct. 1, 2013, you can use the exclusive Marketplace to find health coverage that fits your budget and meets your needs.2

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