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The Affordable Care Act has affected the way we do business and if you’re self-employed or run a small business there are a few things you should know that affect you:
If you are self-employed meaning that you run a business with no employees and you earn an income, then you can get coverage through the Healthcare Marketplace. Even if you already have individual insurance, which is a plan you bought on your own, you still might be able to switch over to a Marketplace healthcare plan.
Small businesses are classified as having 50 or fewer full time equivalent employees under the health care law. As a small business you may get insurance for your employees (including yourself) through the SHOP (Small Business Health Options Programs Marketplace). In 2016 the SHOP will be available to businesses with 100 or fewer full time equivalent employees.
As an employer you must give notifications to your employees of the coverage you allowing your employees to take part in that are part of the Marketplace. If you implement this mid-year, you must notify all current employees regardless of the plan status or their full or part time status.
If you are a small business with less than 25 employees, you may be able to qualify for a Small Business Tax Credit as a direct result of your plan options.
The Small Business Tax Credit applies to companies that pay full time employees an average of $51000 or less and pay at least half of the premiums for employee health insurance coverage. The credit given is equivalent to 50% of the contribution toward the premiums paid for the employees (up to 35% for tax exempt employers). Companies receive the highest tax credit if they have fewer than 10 employees of which are paid an average of $25000 or less.
For those businesses not offering minimum essential coverage with 100 or more full time equivalent employees will have a tax levied starting 2015. Starting 2016 employers with at least 50 employees but fewer than 100 will have an obligation to the additional tax. This additional tax is known as the Employer Shared Responsibility Payment and is determined partly by whether you offer insurance or meet the minimum requirements.
If you have questions regarding what the best option might be for you, please contact us. Figuring out exactly what plan may be best for your company can be a complicated and costly decision. You should therefore receive proper guidance from our professional staff before ultimately coming to a conclusion.