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ACA does NOT require all small businesses to provide health insurance


Health Care ReformYou own a small business. Under the Affordable Care Act (ACA), do you have to provide health insurance for your workers? According to eHealth’s Fall 2012 Small Employer Benefits Survey, two-thirds of you really don’t know. The answer, of course, is that it depends.

Groan. (I know. Sorry.)

The law is complicated. At 2,409 pages, how could it not be? But here’s what it says about which businesses should provide coverage for their employees:

  • For businesses with less than 50 full-time equivalent (FTE) employees, offering health insurance to employees is optional—there are no penalties.
  • Companies with 50 or more FTE employees may be penalized if they do not offer coverage or if they offer coverage that doesn’t meet the ACA’s requirements.

So if you’re a small business with less than 50 FTE workers, you can do as you please. There are no taxes or penalties. There are tax credits available (see WPS’ informative brochure) if you want to offer health insurance to your employees and you purchase that coverage for them through the exchange in 2014. Alternatively, you could also have them buy their own individual insurance off your state’s health insurance exchange in 2014 (they might be eligible for a premium subsidy, depending on their income). The main point here is that you are not required to do anything—you have choices.

If your business has 50 or more FTE employees, it gets more complicated. At that size—even if you consider your business small—your business is considered a large employer under the ACA. And if you don’t offer health insurance, you might get penalized. There are certain requirements that have to be met before your large business is penalized, which I won’t go into in this post. Let’s stick to small businesses for now.

If you’d like to hear about how the penalties work, add a comment below. If there are other aspects of the ACA you’d like to learn more about, you can comment on that, too.

For more information on how the ACA affects small businesses, take a look at our brochure, 7 Things Small Businesses Need To Know About Health Care Reform. It offers a more in-depth look at some issues small business owners should consider.


What are the required postings (if any) of a Small business <50 about the Affordable Care Act? A company that provides Mandatory Postings was insisting that I need to purchase a kit with this information.  
Thank you, 
Posted @ Thursday, September 05, 2013 10:05 AM by Pat Maynor
Pat, the question you're asking is complicated. Employers may have to post any number of things, from discrimination policies to minimum wage documents. You should check with your attorney. I'm not sure what the company was trying to sell you, but it may have included more than just ACA postings.  
As far as the ACA goes, you can check out this link for more information: http://www.dol.gov/ebsa/newsroom/tr13-02.html 
Again, talk with your attorney and make sure you've got your bases covered. Thank you for reading our blog!
Posted @ Thursday, September 05, 2013 4:26 PM by Ryan Kanable
for a company with >50 employees: 
understand requirement to offer a plan providing "minimum value". understand maximum cost to employee to make plan "affordable". what is required $ contribution (if any) for dependents of employee??
Posted @ Tuesday, October 15, 2013 1:19 PM by Greg
Thanks for the question, Greg. The Affordable Care Act only requires large companies to provide health insurance for their workers. What they offer to the families of their employees is up to each company. A company can choose to provide a family health plan or to only insure the employee and send the dependents to the Marketplace. 
Thank you for reading our blog!
Posted @ Tuesday, October 15, 2013 1:33 PM by Ryan Kanable
thanks for quick reply. one more question....at one point (early) there was a requirement to provide a voucher for employees that chose not to accept the company plan, even though the plan qualified. have not seen anything about that lately. is it still requirement?
Posted @ Tuesday, October 15, 2013 1:50 PM by greg
Greg, if the coverage a large business offers is considered "affordable" and meets minimum value, employees will not be eligible for lower costs on their monthly premiums if they buy through the Marketplace. This means the business won't have to make an Employer Shared Responsibility payment for those employees. There also is no requirement for vouchers, although I'm sure employees would love them! Thanks for the great question.
Posted @ Tuesday, October 15, 2013 2:18 PM by Ryan Kanable
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