Navigating the New Health Care Law For Sole Proprietors and Small - - PowerPoint PPT Presentation

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Navigating the New Health Care Law For Sole Proprietors and Small - - PowerPoint PPT Presentation

Feb 10, 2023 268 likes •457 views

Navigating the New Health Care Law For Sole Proprietors and Small Businesses (50 employees or less) This presentation is intended for educational purposes only and not intended as a legal, tax, or insurance advice. Readers should consult their

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www.pasbdc.org/ppaca 1

Navigating the New Health Care Law

For Sole Proprietors and Small Businesses (50 employees or less)

This presentation is intended for educational purposes only and not intended as a legal, tax, or insurance advice. Readers should consult their legal, tax, or healthcare advisors to discuss how these matters relate to their individual business circumstances.

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www.pasbdc.org/ppaca 2

Overview

  • Affordable Care Act (ACA) requires

healthcare coverage through individual mandates and employer shared responsibility

  • Small businesses with fewer than 50

employees are exempt

  • Individuals must obtain health insurance by

January 1, 2014

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www.pasbdc.org/ppaca 3

Self-Employed

  • Starting October 1, 2013 business owners without

a common law employee may purchase individual coverage through the Insurance Marketplace for coverage starting January 1, 2014 (www.healthcare.gov)

  • Based on annual income self-employed

individuals may qualify for individual tax credits/cost sharing reductions (http://kff.org/interactive/subsidy-calculator/)

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www.pasbdc.org/ppaca 4

Important Definitions and Thresholds

Exemptions

 Individuals who cannot afford coverage (insurance premium is more than 8% of their annual income);  Taxpayers with income below the filing threshold;  Members of Indian tribes;  Hardship;  Individuals who experience short coverage gaps;  Religious conscience;  Members of a health care sharing ministry;  Incarcerated individuals; and  Individuals who are in the USA illegally

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www.pasbdc.org/ppaca 5

Premium Assistance Subsidy (Tax Credit)

Household Income Level (% above Federal Poverty Level)

*In 2013 the FPL is $11,490 for a family of one plus $4,020 for each additional person

Maximum Premium as Percentage of Income Less than 133% 2.0% At least 133% but less than 150% 3.0% - 4.0% At least 150% but less than 200% 4.0% - 6.3% At least 200% but less than 250% 6.3% - 8.05% At least 250% but less than 300% 8.05% - 9.5% At least 300% but less than 400% 9.5%

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www.pasbdc.org/ppaca 6

Penalties

Year Amount OR 2014 $95 per adult/$47.50 per child (up to $285 per family) 1% of taxable income 2015 $325 per adult/$162.50 per child (up to $975 per family) 2% of taxable income 2016 $695 per adult/$347.50 per child (up to $2,085 per family) 2.5% of taxable income After 2016 Increased annually by cost-of-living adjustment Increased annually by cost-of-living adjustment

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www.pasbdc.org/ppaca 7

Important Definitions and Thresholds

Shared Responsibility

  • Under the ACA, the Federal Government, State Governments, insurers, employers,

and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States.

  • Starting in 2014, the individual shared responsibility provision calls for each

individual (including self-employed) to have minimum essential coverage, qualify for an exemption, or make a shared responsibility payment when filing a federal income tax return.

  • Individuals will not have to make a penalty payment if coverage is unaffordable, if

they spend less than three consecutive months without coverage, or if they qualify for one or more of the exemptions.

  • Employees who are offered coverage by an employer are not eligible for premium

credits unless: – The value of an employer plan coverage is less than 60% – Or if employee share of the premium exceeds 9.5% of his/her annual income

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www.pasbdc.org/ppaca 8

Important Definitions and Thresholds

Minimum Essential Coverage

  • The type of coverage an individual needs to have to meet the

individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain

  • ther coverage.
  • Under the Affordable Care Act each state may decide whether
  • r not to expand Medicaid coverage.
  • The ACA requires that all non-grandfathered individual and

small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits.

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www.pasbdc.org/ppaca 9

ACA Benefit Tiers

Plan Provides Benefit Cost Coverage Out-of-Pocket Limit Bronze Essential health benefits 60% Equal to Health Savings Account (HSA) Silver Essential health benefits 70% Equal to HSA Gold Essential health benefits 80% Equal to HSA Platinum Essential health benefits 90% Equal to HSA Catastrophic Coverage level set at HAS, except for prevention benefits and three PC visits Available to those under 30 years of age and exempt individuals Prevention benefits and three PC visits are exempt from the deductible

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SLIDE 10

www.pasbdc.org/ppaca 10

Small Businesses with <50 Employees

  • Starting October 1, 2013 businesses with 50 or fewer employees are

eligible to enroll in the SHOP for coverage starting January 1, 2014 and throughout the year on a monthly basis thereafter

  • ACA exempts all firms with 50 or fewer employees from any employer

shared responsibility requirements

  • Once enrolled a business can grow and still remain in the SHOP
  • Enroll directly through SHOP www.healthcare.gov or through a broker
  • Based on the number of employees, a business might qualify for health care

tax credit

  • The amount of the credit works on a sliding scale: the smaller the business,

the bigger the credit

  • For more information, call 1-800-706-7893.
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SLIDE 11

www.pasbdc.org/ppaca 11

Important Definitions and Thresholds

  • FTE is defined as an employee who works on average 30 hours per

week or more

  • A combination of employees, each of whom individually is not a full

time employee because they are not employed at least 30 hours per week, but who, in combination are counted as the equivalent of a full time employee

  • To figure average wages, divide total wages paid to employees by

the number of FTEs

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www.pasbdc.org/ppaca 12

Small Business Health Care Tax Credit Available

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SLIDE 13

www.pasbdc.org/ppaca 13

Notice Requirements for Employers

  • All Employers must give notice about Health

Insurance Marketplace to all employees

  • Deadline = October 1, 2013
  • If Business offers health insurance benefits:

http:www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

  • If Business does not offer health insurance

benefits:

http:www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf

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www.pasbdc.org/ppaca 14

Where to Get Insurance

  • Determine how employees are currently covered

there may be spousal coverage, Medicaid or Medicare eligible employees

  • Obtain insurance through the Small Business

Health Options Program (SHOP)

  • Employees may obtain insurance through federal

marketplace (exchange)

  • Maintain your current private insurance
  • Contact chambers, business associations,

insurance brokers

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www.pasbdc.org/ppaca 15

Current To Do List

  • Conduct Census of employees and their insurance

needs

  • Remember that Individual business owners are required

to purchase health insurance for themselves

  • Develop budget for health insurance purchase

– Individual – Employees

  • Consult with licensed professionals
  • Prepare and give notice of Health Insurance

Marketplace to employees

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www.pasbdc.org/ppaca 16

Web Sites

  • www.healthcare.gov – HHS main resource for individuals and

small businesses

  • www.hhs.gov – US Department of Health and Human Services
  • www.sba.gov – main resource for businesses and sole proprietors
  • www.cms.gov/cciio - Center for Consumer Information and

Insurance Oversight

  • www.dol.gov/ebsa/healthreform - Department of Labor’s

dedicated ACA webpage

  • www.HealthCareandYou.org – developed by a coalition of

medical professionals and geared toward answering consumer questions about ACA and Health Care regulations

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www.pasbdc.org/ppaca 17

Consultants and Experts

  • SBDC Consultants
  • Benefits Consultants
  • Accountants
  • Insurance Brokers and Agents
  • Note – please subscribe to updates as specific

compliance and reporting requirements are being revised and defined.

This presentation is intended to highlight the more important aspects of ACA

  • n small business. This is not intended to replace professional advice and it is

strongly suggested that small business owners obtain the appropriate legal, tax, and insurance advice before making decisions on insurance coverage.