Beginning October 1, the first stages of the Affordable Care Act will go live. Americans looking for health insurance will have access to an online health insurance exchange where they can compare policies and ultimately purchase a plan that suits their individual needs. Because this is a new change to the way health insurance is administered, many families are confused or concerned about how the changes will impact them as a household employer.
To help these families feel more comfortable moving forward, we’ve created the following Frequently Asked Questions for household employers:
What is the Affordable Care Act?
The Patient Protection and Affordable Care Act, commonly referred to as the Affordable Care Act, is a federal statute which was signed into law in 2010. The statute is primarily aimed at reducing the overall cost of health care and decreasing the number of uninsured individuals living in the United States by enacting a number of different mandates, subsidies and tax credits.
Am I required to offer health insurance to my employee(s)?
No, employers are not required to offer health insurance if they employ fewer than 50 employees. However, you are required to provide your current employee(s) and, at the time of hire, any future employee(s) with notice of the new Health Insurance Marketplace.
Is my employee required to have health insurance?
Yes, beginning in 2014, your employee may be charged penalties if she does not have health insurance coverage. However, you are not responsible for making sure your employee has health insurance.
What is the Health Insurance Marketplace?
The Health Insurance Marketplace, or The Marketplace, is a “one-stop shop” where individuals can compare and purchase health insurance policies. Open enrollment for The Marketplace begins on October 1, 2013 for coverage beginning January 1, 2014. Your employee(s) will be able to purchase health insurance through The Marketplace until open enrollment ends on March 31, 2014. For more information on The Marketplace, or to complete an online application for health insurance coverage, please visit www.HealthCare.gov.
How much will health insurance cost?
The cost of health insurance will vary depending on your state and the amount of coverage your employee chooses. After completing an application through The Marketplace, your employee will be able to compare prices and coverage options for different health insurance policies. Depending on your employee’s income and family size, she may be eligible for the Advance Premium Tax Credit if she purchases insurance through The Marketplace. The credit can be applied directly to her monthly premiums which results in immediate cost savings. If she qualifies for the Advance Premium Tax Credit, her savings will be reflected in the prices displayed on The Marketplace.
If I contribute to my employee’s health insurance policy, will I be eligible for any tax breaks?
If you set up a health insurance policy for your employee through SHOP (Small Business Health Options Program) on the Marketplace and pay at least 50% of your employee’s premiums, you may be able to take advantage of the Credit for Small Employer Health Insurance. To take this credit, you’ll attach Form 8941 to your personal income tax return. Beginning in 2014, the credit will increase to up to 50% of the contribution you pay. For more information regarding the requirements for contributing to health insurance, please contact our office.