Top Three Things Small Businesses Should Know About the Affordable Care Act
The Affordable Care Act will help small businesses by lowering premium cost growth and increasing access to quality, affordable health insurance. Depending on whether you’re a small employer or a larger employer, different provisions of the Affordable Care Act may apply to you as described below.
1. Businesses with Fewer than 25 Employees- Small Business Tax Credits
The Affordable Care Act does not require that businesses provide health insurance, but it offers tax credits for eligible small businesses that choose to provide insurance to their employees. To qualify for a small business tax credit of up to 35% (up to 25% for non-profits), you must have:
Fewer than 25 full-time equivalent employees
Pay average annual wages below $50,000
Contribute 50% or more toward employee health insurance premiums
Beginning in 2014, this tax credit goes up to 50% (35% for non-profits) and is available to qualified small businesses who participate in the Small Business Health Options Program (SHOP) Exchanges.
2. Businesses with 50 or Fewer Employees- Affordable Insurance Marketplaces
The Affordable Care Act does not require that businesses provide health insurance, but beginning in 2014, small businesses with generally 50 or fewer employees will be able to purchase coverage through SHOP , competitive marketplaces where small employers can go to find health coverage from a selection of providers. The SHOP Marketplaces and Individual Marketplaces for those who are self-employed open on January 1, 2014. Open enrollment begins on October 1, 2013. SHOP will offer small businesses increased purchasing power similar to that of large businesses.
U.S. Small Business Administration