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Small businesses and governments that have fewer than fifty employees may qualify for tax credits that make it more affordable to provide health insurance to their employees. They also have some unique rights and responsibilities.
In general, businesses and tribal governments with fewer than 50 employees are considered a “small business.” In some states, this will include you if you are self-employed with no employees. Contact your State Department of Insurance to find out whether this applies in your state.
If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.
Starting in 2014, the small business tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses. This makes the cost of providing insurance even lower.
The Affordable Care Act does not require small businesses or tribal governments to provide health insurance for their employees.
The Employer Responsibility provision of the Affordable Care Act applies businesses with more than 50 full-time workers.
It depends–states vary on what they require insurers to cover in small employer plans. Contact your State Department of Insurance for more information about small employer coverage requirements in your state.
If you are a small employer with 2-50 employees, health insurance companies cannot turn your business down based on the health status of your employees or their family members. This rule applies when you initially apply for small employer coverage and if you decide to change plans.
An insurer must also accept everyone in your group. Employees or family members (if you offer dependent coverage) with health conditions cannot be excluded from coverage.
Health insurance companies must sell you any small employer health plan they sell to other small employers in your state.
Contact your State Department of Insurance to learn more about your rights to getting and keeping small employer coverage.
Starting in 2014, small businesses with generally fewer than 100 employees can shop in an Affordable Insurance Exchange—a new, transparent, competitive marketplace where individuals and small businesses can buy affordable, qualified health benefit plans. This gives small businesses power similar to what large businesses have to get better choices and lower prices for employee coverage.
Exchanges will offer more choices of high-quality coverage and lower prices. Exchanges will offer a choice of plans that meet certain benefits and cost standards.
Most states, but not all, limit how much premiums can vary due to employees’ health status and other factors. Even within these limits, premiums can be significantly higher if someone in a small employer plan has a serious health condition.
Under the Affordable Care Act, this will change. Starting in 2014, insurers won’t be allowed to charge more based on the health status of your group or the gender of your employees. There will also be limits on how much premiums can vary based on age.
Contact your State Department of Insurance for more information about small employer rating rules in your state.
No, your insurance for the group (or for any member of the group) cannot be canceled because someone in your group becomes sick. This is called “guaranteed renewal.”
Employers do not have to report the cost of insurance on employee W-2s in 2011. This reporting is optional in 2011.
The reporting requirement is intended to be informational and provide employees with greater transparency into health care costs. The amounts reported are not taxable.
Under the Affordable Care Act, health benefits provided or purchased by the Indian Health Service, tribes, or tribal organizations are excluded from gross income. Now tribes can purchase insurance without fearing that their members will have to pay taxes on those benefits.