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Inform your health care reform strategy
Under health care reform, businesses with 50 or fewer full-time-equivalent employees aren’t required to offer health insurance and are not subject to potential tax penalties. If you choose to offer coverage, small business exchanges and financial assistance will be available to make this easier. If you choose not to offer coverage, your employees will still be able to buy individual coverage.
What to consider
As a small business, you have several coverage options:
- continue purchasing group health care coverage directly from an insurer
- make coverage available to your employees through the Small Business Health Options Program (SHOP)
if available in your state
- offer neither group coverage nor access to the SHOP — sending your employees to the individual marketplace in your state
What to do
Decide which coverage option works best for your business and your employees.
Weigh the pros and cons of each health care coverage option described above.
Get familiar with the SHOP.
Get to know the available plan levels and cost sharing.
Learn how your current plan will affect your upcoming renewal.
- If you have a metal plan, decide whether you’ll keep that plan or select a different metal plan.
- If you have a nonmetal plan and have the option to keep that plan, decide whether you’ll keep that plan or choose a metal plan.
- If you have a nonmetal plan and can’t keep that plan, you may be offered a metal plan that most closely resembles your current plan. Decide whether you’ll offer that metal plan or choose a different metal plan.
Find out if you’re eligible for a tax credit.
If you have 24 or fewer full-time-equivalent employees, evaluate whether you’re eligible for a tax credit. You can carry any eligible health care tax credit back one year.
Determine if you’re subject to the employer shared responsibility regulations.
If you’re a larger small business with part-time workers — or a subsidiary of a larger organization — you’ll need to determine whether you’re subject to the ACA’s employer shared responsibility regulations.
Limit FSA contributions.
Starting in 2015, make sure you’re limiting annual employee paycheck contributions to flexible spending accounts (FSAs) to $2,550.
Provide written notice about marketplaces.
Provide written notice about health insurance marketplaces to new employees.
Review your current wellness program.
Review your current wellness program to make sure you’re maximizing employee rewards. Starting in 2014, the maximum reward for health-contingent wellness programs is 30% of the cost of coverage (with an additional 20% for programs that prevent or reduce tobacco use).
Although we have attempted to present accurate information, Kaiser Permanente disclaims any express or implied warranty as to the accuracy of any material contained herein, any liability with respect to it, and any responsibility to update this material for subsequent developments. As required by the IRS, we inform you that any tax advice contained in this document was not intended or written to be used or referred to, and cannot be used or referred to, (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing, or recommending to another party any transaction or matter addressed herein. Users should consult with their own attorney or tax professional before making tax-related decisions.
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