ACA Changes for Small Businesses In 2016

The Affordable Care Act (ACA) which was passed in 2010 has requirements that will go into effect starting in 2016.  These requirements will have consequences for small businesses.

50-99 Full-Time Equivalent Employees:

Businesses will have to start providing health insurance to their employees if  they have 50-59 full-time equivalent employees.  Businesses will have to provide insurance to those employees and their dependents up to age 26 or pay a fine.

100 or More Employees:

Businesses with 100 or more full-time equivalent employees have to start providing health insurance to at least 95 percent of their full-time employees and their dependents up to age 26.

Employer Shared Responsibility (Employer Mandate):

Businesses with 50 or more full-time equivalent employees will be required to pay a monthly penalty per employee if they don’t offer health insurance.  This penalty can also be levied if the insurance coverage does not meet “minimum value” or is deemed not “affordable”. 

Form 1095-C:

Businesses are now required to provide their employees with Form 1095-C.  Businesses are also required to send a copy to the IRS by 29 February 2016, or 31 March 2016 if not filed electronically.

Tax Credit:

Small businesses with less than 25 full-time employees that provide health insurance to their employees can earn a tax credit if those employees earn less than $50,000 per year.  To get the credit small businesses insurance coverage must be made on the Small Business Health Option Program (SHOP).

Employee Notification:

Employers are required to provide workers with a standard Summary of Benefits and Coverage (SBC) form that explains what their plan covers and what it costs.  The penalty for not complying with this requirement is $1,000.00 per enrollee for each failure to comply.

Sources:
(SHOP) HealthCare.gov
The Small Business Zone

By Bill Williams