ObamaCare Changes: What You Need to Know Now

The Affordable Care Act has given business owners plenty of deadlines and changes to track, on top of the daily work of managing their business.

Here’s a quick look at the pertinent changes and deadlines you need to know right now.

The Employer Mandate for 2015-16

The Employer Mandate, originally scheduled to begin in 2014, requires that all business with 50 or more full-time workers provide health insurance for their employees. However, the deadlines have been delayed until 2015 and 2016, depending on business size.

Businesses with 100 or more full-time equivalent employees must offer coverage to at least 70% of their employees in 2015, and 95% in 2016.

Businesses with 50 – 99 employees should report on workers and coverage in 2015, but have until 2016 to provide insurance for their employees.

Failure to provide coverage by your deadline will make you liable for employer responsibility payments, up to $2,000 per employee per year (excluding the first 30 employees). After your coverage deadline has passed, those payments will be due on a monthly basis.

How Many FTE Employees Do You Have?

Employer requirements refer to full-time equivalent employees, an important distinction from full-time employees.

A full-time employee is anyone who works an average of 30 hours or more a week. However, calculating full-time equivalent employees means you take into account your seasonal and part-time employees as well.

The IRS puts it this way: “…an employer that employs 40 full-time employees (that is, employees employed 30 or more hours per week on average) and 20 employees employed 15 hours per week on average has the equivalent of 50 full-time employees, and would be an applicable large employer.”

What To Do Now

If you haven’t already, determine how many FTE employees you have, so you can then determine how much coverage you need to offer. To determine FTEs for your business, calculate the total employee hours per year, then divide those hours into 30 hour per week units. The number of units you have is the number of full-time equivalent employees in your business.

For more help on determining how many FTEs your business has, see this guide from the IRS.

SHOP Marketplace Options and Tax Credits

Smaller businesses (fewer than 50 FTEs) can use the SHOP Marketplace, at anytime, to offer coverage for employees.

Businesses with 25 or fewer FTEs may qualify for a tax break, up to 50% of their contribution to employees’ premiums. Businesses with over 25 FTEs may qualify on a sliding scale, based on the number of employees and average annual wages. Use this tax credit calculator to determine if your business qualifies.

What To Do Next

If your business has 100 or more FTEs, start researching the coverage options you have to offer employees. You need to meet that 70% coverage mark this year.

If your business has 50 to 99 FTEs, start tracking your employer hours and researching insurance coverage options for 2016. The more prepared you are, the easier the transition to providing coverage for your employees.