Employers and Small Businesses

The Affordable Care Act has different implications for businesses depending upon your company’s size and whether you currently offer health benefit plans to employees.

• Small employers: No new requirements to provide coverage are imposed on small employers with less than 50 employees. But you will have new health insurance options available to you through Small Business Health Options Program (SHOP) Marketplaces.

Employers with 51 – 100 eligible employees: Slightly larger employers may face some new requirements to either provide coverage or pay a penalty.

1. SHOP Marketplaces
2. Tax credits and
3. An insurance mandate

Small Business Health Options Programs – “SHOP” Marketplaces

• By 2014, states will have to establish Small Business Health Options Programs, or “SHOP Marketplaces.” The SHOP Marketplace will make it possible for small businesses to compare health plan options, benefits and prices.
• Businesses with up to 100 employees will be able to buy insurance for their employees using the SHOP Marketplace. SHOP will be administered by the federal government in the state of Tennessee.
• The state may allow businesses with more than 100 employees to purchase coverage on the SHOP Marketplace as well.
• The health care reform law states that four types of plans may be offered on the small business Marketplace:
• For 2010 – 2013, tax credits will be available to small businesses with up to 25 employees. The tax credit may be as much as 35 percent of premiums. This applies to employers who pay at least half of their employees’ premiums.
• Beginning in 2014, these tax credits will increase to cover up to 50 percent of premiums.
• Small businesses with up to 10 employees who have annual wages of less than $25,000 will be eligible for tax credits up to 35 percent of premiums. 
• Starting in 2014, businesses with more than 50 full-time equivalent employees will be required to either offer health care coverage or pay a penalty of $2,000 a year per full-time worker as long as at least one employee is receiving a tax credit and coverage through a Health Insurance Marketplace.
• The health care coverage offered will also have to meet minimum benefits – covering both a specific set of services and 60 percent of employee health costs overall – or else employers will face additional penalties.

Overall, small businesses will be most impacted by health care reform through the introduction of:

Small Business Health Options Programs – “SHOP” Marketplaces

+ As currently designed

Tax Credits

• For 2010 – 2013, tax credits will be available to small businesses with up to 25 employees. The tax credit may be as much as 35 percent of premiums. This applies to employers who pay at least half of their employees’ premiums.
• Beginning in 2014, these tax credits will increase to cover up to 50 percent of premiums.
• Small businesses with up to 10 employees who have annual wages of less than $25,000 will be eligible for tax credits up to 35 percent of premiums. 

Insurance Mandate

• Starting in 2014, businesses with more than 50 full-time equivalent employees will be required to either offer health care coverage or pay a penalty of $2,000 a year per full-time worker as long as at least one employee is receiving a tax credit and coverage through a Health Insurance Marketplace.
• The health care coverage offered will also have to meet minimum benefits – covering both a specific set of services and 60 percent of employee health costs overall – or else employers will face additional penalties.

Health Care Reform Taxes and Fees Impact You 
While the Affordable Care Act (ACA) will make health insurance more affordable for some, it is expected to increase premiums for others.

The ACA’s fees and taxes are designed to fund the provisions of health care reform and help offset costs required to carry out the legislation. But, as a result, these taxes and fees are expected to drive up premiums for people covered under individual and employer plans.

To learn more about what’s driving the cost of health care, visit www.KnowTheCostTN.com. The website includes a section on Health Care Costs 101, how reform impacts costs and what BlueCross is doing to advocate for quality, affordable care.