Many small business owners are still confused about how healthcare reform affects their business and taxes. Like many policy issues affecting tax season, the topic can be complicated.
Luckily, we've got some help for you.
The basics of healthcare reform and small businesses:
The foremost point of confusion for many business owners are the penalties associated with the Affordable Care Act (or the ACA, also called Obamacare).
The number one thing to know about how healthcare reform affects small business owners is that the Affordable Care Act requirements only affect small businesses with 50+ employees. If you employ fewer than 50 people, you’re not obligated to provide a healthcare policy to your employees, just as it was before the ACA.
However, any employer with more than 50 employees or employee equivalents must provide health insurance policies to their employees or the business risks incurring a fee. But it’s important to note you don’t have to pay for employees' healthcare: Employees still pay for their own healthcare plans; the small business employer only must offer the policy to employees through a group plan that meets the minimal coverage requirements.
For each employee not offered a healthcare plan at a small business with 50 or more employees, the business owner can incur a fee.
To help clear up any more questions you have about how healthcare reform affects small businesses, we’ve rounded up three helpful articles to give you more insight.
• Are you prepared for new Obamacare tax forms? – USA Today
This article provides information on each type of tax form associated with the ACA – Form 1095-A, Form 1095-B, sent to employees of businesses with fewer than 50 full-time employees, and Form 1095-C. This is a great look at what each form means and what they contain.
This article is a few years old but still brings up helpful points to make sure you’ve got the full picture on how healthcare reform affects small business.
• The Economic Effects of Health Care Reform on Small Businesses and their Employees – The White House
“Small businesses play an important role in the U.S. economy and are a strong driver of job growth and innovation. But small businesses are severely disadvantaged by the current U.S.health care system relative to their larger counterparts,” – This pre-ACA report gives an in-depth look at small businesses’ challenges in the larger marketplace. If you’re up for in-depth reading, this report offers interesting insights!