Significant changes to the Affordable Care Act are happening.
For smaller businesses with 50 or fewer employees, the business portal for the ACA, called SHOP, is up and running.
You are not required to offer health insurance to your employees, but if you have fewer than 25 employees who are paid under $50,000, there are tax credits for the next two years if you do. The tax credits are significant – up to 50 percent of your cost.
Unlike individual coverage, businesses can sign up for group health insurance any time during the year. You can find the website at healthcare.gov/small-businesses.
For businesses with 50-plus employees, new paperwork has started. Large employers are required to provide all employees IRS form 1095-C along with their W-2s by Jan. 31. Copies of 1095-C will be due to the IRS on Feb. 28. This form requires that you show each employee what health care option you offered, whether their dependents were included, and who was actually covered. The form requires this information for each month of the year. NOW is the time to look at the form and work with an insurance broker to see how you are going to comply with the Affordable Care Act.
I offer these three warnings to all businesses:
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No. 1: Do not bypass the Affordable Care Act by reimbursing employees for their health insurance costs. It is critical that all businesses stop reimbursing employees for health insurance costs and work through group health insurance instead. Even though this practice has been allowed in the past, effective, July 1, 2015, it is not, and there are significant fines for doing so (up to $36,500 per employee). The government considers this double-dipping, because individuals can get reimbursed by their employer plus get a tax credit by going through healthcare.gov. They want businesses to offer group plans and end all reimbursement practices. Click here for information from the IRS on this topic.
No. 2 Do not convert your workers to independent contractors to avoid the Affordable Care Act. There are specific IRS rules for independent contractors which most workers fail to meet. Converting workers will just compound your problems by creating additional fines and penalties.
No. 3: Reducing everyone's hours so they are not full-time does not exempt you from Affordable Care requirements. You must include part-time hours in determining whether you are a small or large employer.
Saba Hailu, marketing director for Tools for Business Success, is writing on behalf of the Missoula Area Chamber of Commerce.