Seder & Chandler, LLP
Worcester 508-471-3018
Westborough 508-709-0024

What responsibilities do businesses have under the Affordable Care Act?

The Affordable Care Act (ACA) has frequently filled the national news with sound and fury.

The debate over the law itself overflowed with passion and partisanship. But Congress passed the law in 2010 and its key provisions were upheld by the U.S. Supreme Court the following year.

Then, last fall, came the rocky rollout of the online exchanges where businesses and individuals can purchase insurance coverage under the new law.

Those exchanges are now operational and the ACA - otherwise known as Obamacare - is no longer in the headlines. But the practical challenges of implementing the new law are as challenging as ever for many businesses.

In this two-part post, we will discuss some of the responsibilities that businesses have under the new law.

First of all, we should note that there are some provisions of the ACA that only apply to small employers. The law generally defines those employers as those that have fewer than 50 employees.

More specifically, this means 50 full-time employees or the equivalent thereof. In other words, it isn't only head count that controls, in determining which provisions of the ACA apply. It depends on how the number of employees translates into full-time equivalents (FTEs).

In addition, an employer with fewer than 50 employees may still be subject to the large-employer rule structure if it is part of an ownership group that has 50 or more FTEs.

Small employers are eligible to purchase insurance coverage for their employees using a program that goes by the acronym SHOP. This stands for Small Business Health Options Program.

The ACA also carries with it certain tax withholding and reporting features. For example, beginning next year employers that provide self-insured health coverage for their employees will have to start reporting that information on tax returns.

As a small employer, you of course have choices to make about how much of your employees' premiums you will cover. There is a Small Business Health Care Tax Credit that may be available to employers who contribute a certain amount.

ACA compliance issues are complicated, however, and this post can only give the most preliminary of outlines to toward their resolution. We encourage you to discuss your specific case with a knowledgeable business lawyer.

In part two of this post, we will discuss ACA rules for large employers.

Source: IRS.gov, "Affordable Care Act Tax Provisions for Small Employers," Accessed May 29, 2014

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