by Bridget Sharpe, PBA Manager of Government Affairs
The Affordable Care Act is officially underway. As a business owner, it is important to know your obligations under the new law to avoid potential fines, and your options to maximize dollars and coverage options for your employees.
As of October 1, any business with at least one employee and $500,000 in annual revenue must notify all employees by letter about the Affordable Care Act’s (ACA) healthcare exchanges, or face up to a $100-per-day fine. However, all employers, regardless of company size, are required to notify their employees about the Affordable Care Act marketplaces. Going forward, letters are to be distributed to any new hires within 14 days of their starting date, according to the Department of Labor.
Earlier this summer, the employer mandate, which states that every business with at least 50 or more full-time employees must offer workers acceptable coverage or face a $2,000 penalty per-worker, per-year, was pushed back until 2015. But the October 1 employee-notification deadline stands.
The U.S. Department of Labor has posted information about the notification requirement on its website and has provided model notices that can be used both by employers who offer insurance and those who do not offer insurance.
The one- to three-page model notices can be downloaded, filled out, and printed, either for distribution in the office or for mailing to employees’ homes. Those forms should be returned to the employer and submitted by the employer. Employees who come on board after Oct. 1 must get the notice within 14 days of their start date with the company. The first page is required and can be submitted via US mail or filed electronically. The second and third pages of the model notices are optional. Small businesses are encouraged to include the upper portion of page 2, which describes the insurance coverage provided by the company, but to leave off the rest of that page and page 3.
Know Your Options
The U.S. Small Business Administration (SBA) classifies a business with less than 100 employees as a “Small Business”. The ACA breaks this group down even further.
Employer with less than 25 employees
Small businesses with less than 50 employees are not required to offer health insurance. However, employers with less than 25 employees who do offer coverage may qualify for special tax credits to help offset costs. According to the SBA, employers with less than 25 full-time employees with average annual wages of less than $50,000, who pay at least half of the cost of health insurance for their employees, are eligible for a tax credit up to 35% to help offset costs. In 2014, this tax credit maximum will increase up to 50% and is available to qualified small businesses that participate in obtaining insurance through healthcare exchanges.
Employer with 25-49 employees
While employers with 25-49 employees aren’t required to offer insurance and do not have the benefit of potential tax credits, they are exempt from the penalties larger companies are faced with if they do not offer coverage to their employees. For this group, the only real change is they will have the option to participate in the SHOP program if they do choose to offer insurance.
Regardless of where your business falls, if you do provide coverage to employees, do your research to know of any extra responsibilities you have under the new laws, such as voluntary disclosure of health insurance costs on employees’ W-2 forms, handing out a “Summary of Benefits Coverage” document describing coverage to employees, and distribution of other forms from health insurance companies.
For additional information, including requirements and options for larger employers, visit healthcare.gov. Also, PBA’s Government Affairs team has compiled a list of helpful documents regarding the Affordable Care Act at probeauty.org/healthcarereform. This page is updated frequently with news and resources to assist members of the professional beauty industry.
About the Author
Bridget Sharpe is the Manager of Government Affairs for the Professional Beauty Association (PBA). PBA advocates for the rights of every member and is dedicated to tracking, introducing and responding to legislation at both the state and federal levels with potential to affect the beauty industry. Along with our Government Advocacy program, PBA provides our members with Education, Signature Events, Charitable Outreach, Research and Business Resources. Visit probeauty.org for more information.