5 Things BUSINESSES Need to Know About ObamaCare

As a follow-up to the blog I wrote earlier in the week (6 Things INDIVIDUALS Need to Know about ObamaCare), hare are 5 things businesses need to know about the Employer Mandate (“employer requirements”) under the the Patient Protection and Affordable Care Act (PPACA–commonly referred to as ObamaCare of the Affordable Care Act [ACA]):

(1)  Only employers defined as “large employers” will be subject to a shared responsibility payment (a tax) if they don’t provide their employees with health insurance.  For purposes of the PPACA, a full time employee works 30 or more hours a week.

  • A large employer is one with more than 50 full-time equivalent employees (FTEs)
  • A full-time equivalent employee is NOT a person – it’s the number of hours a full-time employee works in a calendar year (2,080 hours), i.e., 40 hours x 52 weeks = 2,080
    • If the total number of hours worked by all of employees of a business in a year (including full-time and part-time employee) is 208,000, the employer has 100 full-time equivalent employees
    • It doesn’t matter how many of those hours are worked by full-timers or part-timers

(2) The shared responsibility payment will be imposed on large employers under two circumstances:

  • The employer does NOT provide health insurance approved under the PPACA to its employees AND at least one of those employees purchases coverage through an exchange and receives a premium tax-credit
  • The employer DOES provide health insurance approved under the PPACA to its employees  AND at least one of those employees purchases coverage through an exchange and receives a premium tax-credit

The shared responsibility payment is lower for large employers that DO provide coverage … and it’s calculated differently.

(3) The Employer Mandate has NOT been deferred or postponed.  However, three of its provisions have been delayed.  The IRS published Notice 2013-45 to explain how the delay works and refers to the process as transitional relief.

(4) Small employers are eligible for tax credits if they provide approved health insurance to their employees–and have been receiving them for some time (the PPACA was enacted in March 2010–at which time its provisions began being phased in).  Eligible employers include those:

  • With up to 25 full-time equivalent employees
  • The average annual salary of employees is no more than $50,000
  • The employer pays at least 50% of the employee-only cost of health insurance

Beginning in 2014, the tax credit for eligible small businesses will increase from 35% to 50% (for non-profits, it will increase from 25% to 35%).

(5) Here are some Web links for more information about how the PPACA affects businesses:

You don’t have to be an insurance agent to attend the A.D. Banker webinars I’m presenting on the Affordable Care Act … although you do have to pay for the presentations and CE filing fees. Cost: $27. Click this link for more information about A.D. Banker’s PPACA webinar. Upon arriving at the A.D. Banker website, click on Webinar and choose Health Insurance and the PPACA.

Click this link f you’d like to subscribe to my mailing list to be notified of about other webinars and presentations. I plan to begin presenting informational webinars about insurance to the general public before January. A nominal fee will be charged for these presentation (i.e., $5 – $10)


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Linda McHenry

Linda is an insurance CE provider, course developer/writer, and instructor. She founded Faulkner Education Services in January 2006. She is also a novelist.

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