The Affordable Care Act established the SHOP Marketplace to help small employers offer insurance programs to their employees. Other parts of the health care law affect employers too.
The health care law requires you to provide certain information about the Marketplace to your employees, whether you offer health insurance or not. Detailed reporting requirements can be obtained from the Department of Labor.
Under the health care law, if you offer health insurance to your employees, you must offer it to all eligible employees within 90 days of their employment start date. The IRS provides guidance on the 90-day waiting period rules.
Employers must provide employees with a standard ‘Summary of Benefits and Coverage’ (SBC) form explaining what their health plan covers and what it costs. The purpose of the SBC is to help employees understand their health insurance options. A small business could face a penalty for non-compliance. You can learn more about SBCs and see a completed form.
Under the health care law, employees cannot contribute more than $2550 to their Flexible Spending Accounts per year in tax year 2016. That limit doesn’t apply to employer contributions to the employees’ FSAs. Employers have two (2) options to let employees carry over unspent FSA funds into the following plan year. Learn more about FSA options.
The Affordable Care Act creates incentives to promote employer wellness programs and other activities that support healthier workplaces. The maximum reward to employers using a wellness program that is contingent on employee health has increased from 20% to 30% of the health coverage. The maximum reward for programs designed to prevent or reduce tobacco use is 50%. Learn more about wellness incentives.
Businesses with 50 or more full-time (or full-time equivalent) employees that don’t offer insurance or offer coverage that does not meet certain minimum standards, may be subject to the Employer Shared Responsibility payment. Learn more about the Employer Shared Responsibility payment.
The health care law requires the following organizations and some other parties to report that they provide health coverage:
***Employers with 50 or more full-time (or full-time equivalent) employees;
***Health insurance issuers;
***Self-insuring employers of any size
Learn more about these reporting requirements from the IRS.
Under the health care law, insurance companies must spend at least 80% of premium dollars on medical care. Insurers that do not meet this requirement must provide rebates to policyholders – usually an employer that provides a group health plan. Employers who get these premium rebates must allocate the rebate properly. Learn more about federal tax treatment of Medical Loss Ratio rebates from the IRS.
If you have questions about the health care law and business, you can contact the ACA Employer Call Line at 800-355-5856. You should read the IRS’s guided entitled: ‘Affordable Care Act: What employers need to know.’
You can also go to the US Small Business Administration web page which provides health care information tailored to the size of your business, plus a listing of free Affordable Care Act 101 seminars and other training materials. The Internal Revenue Service offers a guide to tax provisions of the Affordable Care Act for employers and it also features a large set of health care questions and answers for employers.
The above information is the most comprehensive I’ve seen or been able to put together for businesses in relationship to the ACA…..it is complicated and not easily understandable in a ‘first’ read through….
If you have any questions, need clarification or further information, please feel free to contact Rosanne Bennett at 484-947-7063 or at firstname.lastname@example.org.