You Start a Small Business: How the ACA Affects Small Businesses

Do I Have to Offer Health Insurance to My Employees?

You do not have to offer health insurance to employees. However, if you have least 50 full time equivalent employees, you will have to pay a fine, called an employer responsibility fee if:

The employer responsibility fee does not apply to you if you have 49 or fewer full time equivalent employees.

Can I Use the Marketplace to Buy Insurance for My Employees?

Beginning November 2014, small businesses with 50 or fewer employees may use the Small Business Health Options Program (SHOP) to buy insurance for workers. SHOP is like a Marketplace for small businesses. Like the Marketplace, you will be able to easily compare plans based on price, coverage, quality, and other features.

Beginning in 2016, businesses with 100 or fewer employees may use SHOP to buy health insurance for employees.

However, if you use SHOP, many states require that at least 70% of your employees enroll in your SHOP plan. When you use SHOP, it will let you know whether this rule affects you.

Where Can I Find the SHOP Marketplace in My State?

To find your state’s SHOP Marketplace, go to: https://www.healthcare.gov/marketplace/shop

Can I Cover Myself Through a SHOP Plan That I Offer My Employees?

Yes, you can cover yourself through the same SHOP plan you offer your employees.

Can I Get Tax Credits to Help Pay for Insurance?

You may qualify for tax credits to help pay for the cost of providing insurance if:

You can only get the tax credit if you buy coverage through the SHOP Marketplace. The amount of the credit depends on whether you have a non-profit or for-profit business.

Amount of Tax Credit for Small Businesses

For profit business Up to 50% of your contribution to your workers’ premiums
Non-profit business Up to 35% of your contribution to your workers’ premiums

For more information, go to: https://www.irs.gov/Affordable-Care-Act/Employers/Small-Business-Health-Care-Tax-Credit-and-the-SHOP-Marketplace

Where Can I Find More Information?

A great site developed by the U.S. Small Business Administration that breaks down how the ACA will affect you depending on the number of employees you have: http://www.sba.gov/healthcare

A comprehensive fact sheet about how the ACA affects small businesses developed by the Kaiser Family Foundation: http://kff.org/health-reform/fact-sheet/explaining-health-reform-how-will-the-affordable-care-act-affect-small-businesses-and-their-employees/

Information for small businesses created by HealthCare.gov: https://www.healthcare.gov/how-does-the-affordable-care-act-affect-me/#question=small-businesses-question