Obamacare Employer Mandate Penalties Delayed Until 2015
By Hubie Laugharn
The Obama Administration has postponed the Affordable Care Act (ACA) employer mandate penalties for one year, until 2015. The Department of the Treasury announced the delay on July 2, 2013, along with a similar delay for information reporting by employers, health insurance issuers and self-funded plan sponsors.
The delay does not affect any other provision of the ACA, including individuals’ access to premium tax credits for coverage through an Exchange. The Treasury plans to issue more formal information about the delay within a week.
ONE-YEAR IMPLEMENTATION DELAY
Affordable Care Act Small Business
By Hubie Laugharn
Is Insurance Required?
There is no law requiring small business owners to provide health insurance, however the Affordable Care Act makes critical changes that small business owners need to know of when deciding if they are going to purchase insurance for their staff. If you do choose to offer coverage, there are regulations you will have to follow—the most important of which we explain here or in person during one of our consultations.
Though large companies may face penalties if they do not offer coverage under the Affordable Care Act, small businesses with fewer than 50 full-time-equivalent employees will not be penalized if they do not provide coverage. If you have at least 50 full-time-equivalent employees but none receive an individual premium tax credit or cost-sharing reductions (both based on income), there’s no penalty—whether or not you offer health insurance.
To learn more about what the Affordable Care Act requires of small business and to find out how penalties are calculated see “Shared Responsibility Requirement.”
Is Your Business Eligible for Group Coverage?
Under California law AB1672, small employers are guaranteed group coverage should they choose to purchase it, regardless of the employees’ health status. A “small employer” is defined as a business with 2 to 50 full-time employees. Owners are generally counted as employees, so sole proprietorships with one employee fall into this category, as do partnerships without any employees (by definition partnerships have two or more partners).
California state law AB1672 says that small employers cannot be denied coverage as long as they:
- Pay their premiums.
- Have been in business longer than two months.
- Offer medical insurance coverage to all eligible full- and part-time employees.
- Comply with insurer requirements regarding employer contribution and employee participation.
- Have not committed fraud against the insurer.
For more information on small business healthcare and employee benefits, call Solana Insurance Services (949) 675-1920.
Solana Insurance Employee Benefits
3700 Newport Blvd. #309
Newport Beach, CA 92663
Partially Self-Funded Health Plan
With a partially self-funded health plan, an extremely small portion of the claim risk is shifted from the insurance company to the employer in exchange for potential significant savings. The company enrolls in a High Deductible Group Health Plan, which instantly drops the premium drastically. A small amount of the funds saved by the reduction in premium are set aside to cover employees who exceed their max out of pocket. A Third Party Administrator (or TPA) is used to manage those funds, administer the medical plan, process and adjudicate claims and act as a service center and resource for employees.