The Affrdable Care Act Health Insurance Respnsibilities f Large, Midsize & Small Emplyers; Buying Insurance n the Individual Health Insurance Marketplace and the Small Business Health Optins Prgram Intrductin: An Emplyer s respnsibility t ffer health insurance under the Affrdable Care Act depends n the number f its full time equivalent emplyees. A business with fewer than 50 full time equivalent emplyees is nt required t ffer health insurance; beginning in 2016, a business with 50-99 emplyees is, and in 2015, a business with mre than 100 emplyees must ffer insurance t 70% f its emplyees, which increases t 95% beginning in 2016. The uninsured can buy insurance in the Individual Health Insurance Marketplace; financial assistance may be available. Small business wners may buy health insurance fr their emplyees thrugh the Small Business Health Optins Prgram ( SHOP ), fr which they may receive a tax credit.1 Quick Facts: The Health Insurance Marketplace is nly pen frm Nvember 15, 2014 t Februrary 15, 2015 unless individuals have a majr change in circumstances, e.g. a jb lss, the birth f a child, etc., which qualifies them fr a special enrllment perid. Infrmatin is available nline at www.healthcare.gv/quick-guide, perated by the department f Health and Human Services; www.healthlawanswers.rg, perated by AARP; www.nilc.rg, perated by the Natinal Immigratin Law Center; www.healthcverageguide.rg, perated by the Small Business Majrity; and www.chrt.rg, perated by the Center fr Health Research and Transfrmatin. Individuals and the self-emplyed can call 800-318-2596 fr infrmatin abut buying insurance n the Individual Health Insurance Marketplace; small business wners can call 800-706-7893, M-Fri. 9-7 ET fr infrmatin abut buying insurance n the Small Business Health Optins Prgram. The Small Business Majrity prvides weekly webinars n Thursdays @ 2:00 P.M. 1 I. Significant benefits f the Affrdable Care Act. insurers cannt deny cverage fr patients with preexisting cnditins r because an insured gt sick; insurers cannt limit patients lifetime r annual cverage; adult children under 26 can be insured n their parents plan regardless f whether the children live at hme, are married r attend schl; preventive care2 is available with n cst sharing; and insurer decisins are subject t external review. Tax credits are retractively available t small businesses with 25 r less full-time-equivalent emplyees. A litany f preventive services are cvered, fr example, health screenings fr breast and cervical cancer, diabetes and heart disease, immunizatins. See www.hhs.gv/healthcare/facts/factsheets/2010/07/preventive-serviceslist.html. 2
II. Large emplyers are required t begin prviding health insurance in 2015; mid-sized emplyers d nt have t cmply until 2016. Beginning in 2015, emplyers with 100 r mre full-time equivalent emplyees ( Large Emplyers ) must prvide affrdable cverage t 70 percent r mre f their emplyees 3 r pay a penalty. Affrdable means the emplyees mnthly premium cannt be mre than 9.5 percent f their husehld incme. In 2015, Large Emplyers are nt required t ffer cverage t emplyees families. Beginning in 2016, hwever, Large Emplyers must ffer cverage fr emplyees children, but need nt cntribute t payment f the premium. Large Emplyers are nt required t ffer cverage t emplyees spuses. Failure t cmply will subject Large Emplyers t a nn tax deductible payment n their federal tax return f the Emplyer Shared Respnsibility Payment under sectin 498H(a) r (b) f the Internal Revenue Cde equal t the number f full-time emplyees the Large Emplyer emplyed fr the year, minus 30, multiplied by $2,000, as lng as at least ne full-time emplyee received a premium tax credit. (Fr purpses f this calculatin, a full time emplyee des nt include a full-time equivalent.) Beginning in 2016, 4 emplyers with 50 5-99 full-time equivalent emplyees ( Mid-sized Emplyers ) must ffer cverage fr emplyees children, but are nt required t cntribute t payment f the premium. Mid-sized Emplyers are nt required t ffer cverage t emplyees spuses. Mid-sized Emplyers will nt be required t pay the Emplyer Shared Respnsibility Payment in 2015. Nevertheless, the Mid-sized Emplyer must certify that it emplyed at least 50 but less than 100 full time equivalent emplyees during 2014, it did nt reduce its wrkfrce in rder t qualify fr transitin relief and it did nt reduce health cverage in the prir year. 3 The percentage increases t 95 percent f full time equivalents in 2016. 4 Althugh midsize emplyers d nt have shared respnsibility until 2016, the IRS requires that they file a Sec. 6056 transmittal frm in 2015. 5 An emplyer that meets the 50 full-time emplyee threshld is referred t as an applicable large emplyer. www.irs.gv/uac/newsrm/questins-and-answers-n-emplyer-shared-respnsibility. Hwever, this authr has seen small emplyers defined as 50 r fewer and Mid-sized Emplyers defined as 50 r mre. 2
III. Individuals and the self-emplyed may buy insurance in the Individual Health Insurance Marketplace. Individuals and the self-emplyed may buy health insurance in the Individual Health Insurance Marketplace at www.healthcare.gv if their emplyer des nt ffer insurance and they are nt eligible fr Medicare, Medicaid, V.A. r ther benefits. The insurance must be bught during the pen enrllment perid, i.e. Nvember 15, 2014 February 15, 2015. An individual wh des nt have health insurance that qualifies as minimum essential cverage may be assessed a penalty which, in 2015, is either 2% f incme r $325 a persn, whichever is larger. The Internal Revenue Service will cllect the penalty thrugh the individual s tax return. Fr mre infrmatin, see penalty yu must pay if yu dn t have insurance cverage at feesexemptins/fee-fr-nt-being cvered/r call 800-318-2596. Depending upn family size and annual incme, an individual may qualify fr a tax credit r a subsidy. Example: an individual with annual husehld incme between $11,700 and $46,700 r a family f fur with annual husehld incme between $23,900 and $95,400 qualifies fr financial help. Individuals are nt required t buy insurance in the marketplace, but if they buy elsewhere, they are nt eligible fr financial assistance. Undcumented immigrants wh apply fr health insurance fr family members are nt required t prvide infrmatin abut themselves. Mrever, the gvernment issued a mem which says infrmatin prvided in a health insurance applicatin will nt be used fr immigratin enfrcement. There is a limit n the health care csts an individual must pay. In 2015, in additin t premiums, the mst an individual will pay ut f pcket 6 fr essential health benefits supplied by an in-netwrk prvider is $6,600 fr an individual plan and $13,200 fr a family plan. 6 Deductibles, cpayments and cinsurance. 3
Financial help may be available. A premium tax credit may be available t help lw and mderate incme families pay mnthly premiums fr plans bught thrugh the Health Insurance Marketplace. IV. Small Businesses may elect t prvide health insurance t their emplyees thrugh SHOP, an acrnym fr the Small Business Health Optins Prgram. SHOP is the insurance marketplace where private insurance plans cmpete fr business frm small business emplyers. Emplyers select the cverage they want t ffer their emplyees, the sum they want t cntribute tward their emplyees premiums, whether t include dependent and dental cverage and the waiting perid befre new emplyees can enrll. Emplyers can use their wn agent r find ne n the SHOP website. Small businesses with fewer than 25 emplyees which enrll in SHOP cverage may qualify fr a Small Business Health Care Tax Credit wrth up t 50% f their premium csts. See small-businesses/prvide-shp-cverage/smallbusiness-tax-credits. Fr mre infrmatin, call 1-800-318-2596 r visit www.healthcare.gv. Wh can use the SHOP Marketplace. Emplyers with fewer than 50 full-time equivalent emplyees can use the SHOP Marketplace. A full time emplyee wrks 30 r mre hurs a week. Emplyers with a cmbinatin f full and part time emplyees can use the SHOP FTE calculatr at www.healthcare.gv/small-business/prvideshp-cverage/fte- t determine if they qualify. Anther way t determine if an emplyer qualifies t ffer SHOP cverage is t g t/small-businesses/prvide-the-shp-cverage/qualifyfr-shp-marketplace. Emplyers must ffer cverage t all full-time emplyees thse wrking 30 r mre hurs per week n average- but nt t thse wh wrk 29 hurs a week r fewer. In New Jersey, 75% f the full time emplyees must enrll in the SHOP plan. There is n percentage requirement fr emplyers wh enrll between Nvember 15 and December 15 f each year. 4
Self-emplyed individuals withut emplyees cannt use the SHOP Marketplace. They can get health cverage thrugh the Health Insurance Marketplace fr individuals at/quick-guide/ne-page-guide-t-the-marketplace/. Hw t apply fr SHOP Cverage. Visit the small business emplyers page, select NJ and chse Apply Nw. It will take yu t Create an Accunt. Set up a prfile and when yu reach the page titled Where wuld yu like t g? select Visit Emplyer Marketplace. Select Get Assistance if yu want t search fr an agent registered t wrk with SHOP. If yu already have an agent, enter its name and natinal Prducer Number. Cmplete the SHOP applicatin. Create an emplyee rster. Create the enrllment criteria, i.e. the enrllment perid, the effective date f cverage and the new emplyee waiting perid. Set yur premium cntributin and whether yu will cntribute t dependent cverage and a dental plan. Select yur plan; the SHOP Marketplace will send an e-mail t the emplyees yu identified n yur applicatin and ffer it t them. Track emplyee participatin. After the emplyee participatin requirement is satisfied, submit yur enrllment and pay the first mnth s premium. If yu enrll by the 15 th f the mnth, cverage begins the first day f the next mnth. An verview f the SHOP applicatin prcess is available at /smallbusinesses/prvide-shp-cverage/enrll-in-shp/. The telephne number fr the SHOP Small Emplyer Call Center is 1-800-706-7893 M-Fr 9-7 ET; weekends, currently, 9-5. 5
Small Businesses Enrlled May Qualify fr Tax Credits. A small business may qualify fr tax credits up t 50% f its cntributin tward its emplyees premiums if it has fewer than 25 full-time equivalent emplyees; its average emplyee salary is $50,000 a year r less; it pays at least 50% 7 f its full time emplyees 8 premiums; it ffers cverage t full time emplyees thrugh the SHOP Marketplace. Get help frm an agent r brker. Small Businesses that use an agent r brker d nt pay mre fr insurance. 7 35% fr tax exempt emplyers. 8 A small business is nt required t ffer insurance t dependents r t its part-time emplyees wrking fewer than 30 hurs a week. 6