By Dick Ficke
SCORE's mission is to provide as much information as possible to assist existing small businesses grow and prosper as well as mentor entrepreneurs in the start up of new businesses. To that end, the purpose of "What's The SCORE" articles is to provide as much information as possible that is of interest and utility to the small business community. There is probably no issue today that is of more interest to small businesses than the Affordable Care Act. Unfortunately, for a variety of reasons, a great deal of misinformation has been promulgated regarding health care provisions as they apply to small businesses. Trustfully this article will help clarify those provisions.
Right off the bat (excuse the metaphor), it must be understood that SCORE is not a government agency per se. Yes, it is a resource partner of the Small Business Administration (SBA) and it does receive funding through the SBA, but all counselors are volunteers; they do not get paid and report to no one in the government. What I am trying to say is that SCORE is apolitical! It is also necessary to point out that the following information is abbreviated and that more detailed information can easily be accessed by going to www.sba.gov and/or www.healthcare.gov. OK, let's get started.
Q. As a small business, what do I need to know?
A. No small business employer is required to offer health coverage! But if you choose to do so, small businesses may get health coverage in the Small Business Health Options Program (SHOP) Marketplace. Starting in 2014, businesses with 50 or fewer full-time equivalent employees can use SHOP to offer coverage to their employees. This applies to non-profit organizations as well. Open enrollment, Oct. 1, 2013.
Q. What is considered a small business?
A. If you have 50 or fewer full-time equivalent employees, you are considered a small business as it applies to the health care law. If you have fewer than 25 employees, you may qualify for the Small Business Tax Credit.
Q. What if I'm self-employed?
A. If you are self-employed with no employees, you are not considered an employer. You can use the individual marketplace to find coverage that fits your needs.
Q. What is the SHOP Marketplace?
A. The Small Business Health Options Program is intended to simplify the process of buying health insurance for your employees. Starting Jan. 1, 2014, the SHOP Marketplace is open to employers with 50 or fewer full-time employees. Using SHOP, you:
control the coverage you offer and how much you pay toward employee premiums; can compare health plans on-line on an apples-to-apples basis, allowing you to make a decision that is right for your business; may qualify for a small business health care tax credit worth up to 50% of your premium costs. You will still be able to deduct from your taxes the rest of your premium costs not covered by the tax credit. Beginning 2014, the tax credit is available only for plans purchased through SHOP.
Q. Does my business qualify for the SHOP Marketplace?
A. In 2014, SHOP is open to employers with 50 or fewer full-time employees.
If you plan to use SHOP, you must offer coverage to all your full-time employees. (usually those working 30 or more hours a week on average).
In many states, at least 70 percent of your full-time employees must enroll in SHOP (those with coverage through another plan count toward that requirement).
Q. How do I choose coverage that is right for my business?
A. There are four categories of plans in the SHOP Marketplace: Bronze, Silver, Gold and Platinum.
The plans describe the way in which your employees and the plan share costs. The category has nothing to do with the quality of care the plan provides. All plans must provide essential health care benefits in 10 different categories.
Q. What is my immediate obligation to my employees?
A. Employers are required to provide employees with a standard "Summary of Benefits and Coverage" form explaining what their plan covers and what it costs. The Department of Labor provides a sample SBC completed form that may be used for reference.
As you can appreciate, this brief Q/A just scratches the surface of the provisions of the Affordable Care Act as it affects small businesses. By going to www.sba.gov and/or www.healthcare.gov, you will obtain more detailed information regarding those questions as well as access such subjects as Medical Loss Ratio Rebates, W-2 Reporting, Limits On Flexible Spending Account Contributions, Workplace Wellness Program, Use of Health Insurance Agents/Brokers, NH Marketplace and upcoming provisions in 2015.
If you have questions regarding the SHOP Marketplace, call 1-800-706-7915 Monday through Friday from 9 a.m. to 5 p.m.. You can also gain access to the aforementioned links by going to the mtwashington.score.org web site.