Obamacare was enacted in 2010 in order to allow more Americans to purchase affordable health insurance. Obamacare (if you weren’t already aware) refers to the Patient Protection and Affordable Care Act and the new regulations it has implemented to improve the health care industry. Its main requirement is that every American have health insurance either through their employer, a private provider, or a federally assisted program.
Obamacare may have its pros and cons, but do you know enough about it to effectively run your business as an employer? Are you aware of the deadlines that you must meet in order to ensure that your employees have health care coverage? If you don’t, you have come to the right place.
Obamacare and Your Business
Although the law doesn’t require you to do so, as an employer, you should provide your employees with health insurance. If you don’t, you could face high financial penalties thanks to the employer mandate, but this all depends on the size of your business.
Your business consists of 100 or more full-time equivalent employees
Starting January 2015, if you do not provide your employees with health care coverage, you will pay a $2000 tax on each employee (besides the first 30 employees you brought on board). This means that if you have 100 employees and choose not to provide them with insurance, you will pay a $2000 tax on 70 employees. This fee is a per month fee due annually on employer federal tax returns. Therefore, each month you will pay 1/12 of the $2000 per employee. This could be a pretty steep price to pay, and keep in mind that the penalties will increase over the years.
Your business consists of 50-99 full-time equivalent employees
The per employee tax will not apply to businesses with 50-99 full-time employees until 2016. In order to avoid penalties, you should provide health coverage to your employees by 2016.
Keep in mind however, that these requirements do not apply to just full-time employees, but also to full-time equivalent employees (FTE). An FTE can even be a combination of employees who work 120 hours per month (about 30 hours per week). That combination would equal one employee. For more information on how an FTE employee is calculated, make sure to visit www.healthcare.gov.
How to Pick a Group Health Plan for Your Employees
Obamacare has created the Small Business Health Options Program (SHOP) for small businesses. This is the program through which small businesses will shop for health group plans for their employees. The online version of SHOP opens up on November 15, 2014, which marks the beginning of the open enrollment period.
The following dates are important for your to remember:
• Open Enrollment for 2015 will begin on November 15, 2014 and ends on February 15, 2015
• If you want to ensure that your employees have health coverage beginning January 2015, you must pick a group plan by December 15, 2014
As a small business employer, you want to make sure that you abide by Obamacare or you will see the repercussions come tax season. To avoid any potential legal issues, you can easily seek out advice from qualified tax lawyers on virtual legal marketplace UpCounsel who helps provide cost-effective solutions for businesses in order to remain compliant with many times, quite confusing Obamacare regulations.
About UpCounsel
UpCounsel helps businesses and entrepreneurs to easily hire great attorneys on-demand that best match their legal needs and budget. By using UpCounsel’s virtual legal marketplace to get advice and compare free proposals from specialized attorneys, businesses save hours of time searching for legal services and reduce their legal costs by 60% on average when compared to expensive law firms. To date, thousands of companies have used UpCounsel to save millions of dollars on legal services.
For more information, please visit: https://www.upcounsel.com
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