The Affordable Care Act (ACA) is a big and complicated piece of legislation with a whole lot of small details. How relevant is this law to you as a property manager? You may be wondering things like how this is going to change the health insurance you provide your employees, or if you will be required to provide your employees with health insurance. This post will answer these questions and more, so you can understand just how this law will affect you — whatever size your business is.
The Employer Mandate
As a business owner, you’ve probably heard of the employer mandate. However, not every employer is required to provide their employees with health insurance. If you have 50 or more employees, you will have to provide health insurance for every full-time worker. Initially, this mandate was going to go in effect starting in 2014, but that has been pushed back to 2015. What if you decide not to give your employees health insurance? Minus the first 30, you will face a penalty of $3,000 per full-time employee.
Regardless of the size of your business, you will likely have to tell your employees about their options, specifically the federal marketplace for health insurance. A page on Healthcare.gov called What do I need to tell my employees about the Marketplace? will help you figure out if this is a necessity, as well as what exactly you have to tell your employees in the case that it is.
SHOP
For businesses with under 50 employees, you can choose to provide your workers with health insurance purchased at the SHOP marketplace. The idea is for SHOP to function as the small business equivalent of Healthcare.gov’s individual marketplace. You will be able to easily compare plans and control the amount of your employee’s premiums that you will pay. Starting in 2016, business owners with up to 100 full-time employees will also be able to purchase insurance on SHOP.
The Individual Market
Whether you are a self-employed property manager or an employer who has to tell employees about their options, it is important to know a bit about the individual market. It should be noted that, according to the individual mandate, you must have health insurance or you will face a penalty. On the marketplace, plans are organized into four different tiers: bronze, silver, gold, and platinum. The platinum plans have the highest premiums but cover the biggest amount of out-of-pocket costs. As you might expect, the bronze plans have the lowest premiums with the lowest coverage of out-of-pocket costs. The silver and gold plans fall somewhere in between. Once healthcare.gov recovers from its error-laden launch, it shouldn’t be too hard for you to log on and see how it works firsthand.
Tax Credits
Now here is some good news for you: Both the plans bought on SHOP and on the Healthcare.gov individual marketplace are eligible for tax credits. Individuals and families can get tax credits if they make between 100 percent and 400 percent of the Federal Poverty Line (roughly $10,000 to $40,000 a year for individuals). For those buying insurance for them and their families, it is important to note that the Federal Poverty Line is higher the more people there are in your family. To get a rough idea of an individual’s tax credit, check out the Kaiser Family Foundation’s subsidy calculator.
As for the SHOP marketplace, businesses with less than 25 full-time employees making an average of around $50,000 a year or less are eligible for a tax credit. Additionally, you have to cover at least 50% of your employees’ premiums. The tax credit can be pretty sizable, covering up to 50% of your contribution towards your employees’ premiums. To learn a bit more about the SHOP tax credit, check out Will I qualify for small business health care tax credits?
Grandfathered Plans
With all this talk about the marketplace plans, you may be wondering if you can simply keep the plans already offered to your employees. The answer is ‘yes,’ given a few things. Plans that existed before March 23, 2010 can be grandfathered in, and they do not have to comply with the full regulations of the ACA. However, they still have to do a few things such as cover adult children up to the age of 26 and end lifetime limits.
Additionally, the insurance companies cannot continue to offer the plan if they have made certain major changes since March 23, 2010, such as substantial cuts in benefits provided or increasing up-front deductibles past a certain point.
Negligible to Big Changes for Your Company’s Health Insurance Situation
As you can see, the ACA can be a good or a bad thing depending on your situation. In some cases, the tax credits can end up saving you a fair bit of money. Whatever the case, it is important to stay on top of the latest news with this law. As evidenced by the delay of the employer mandate, things are always subject to change. Who knows? Things might even work out in your favor.
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