March marks the fourteenth anniversary of the Affordable Care Act (ACA), and yet many small business owners still have questions about the ACA and group health insurance responsibilities.
This month’s blog explores how the ACA and group health insurance impact California small businesses, including the goal of the ACA, the responsibilities of employers, and the options available to small businesses in the state.
Understanding the Affordable Care Act
The goal of the ACA (which was signed into law on March 23rd, 2010) is to make ready access to healthcare more affordable for Americans. The Act brought various reforms to the health insurance industry, focusing on expanding coverage and protecting consumers. Some of the key goals of the ACA include:
Coverage for young adults: The ACA provides that young adults can remain on their parents’ health insurance plans until age 26, providing them with continued access to coverage during a critical stage of their lives.
Prohibition of coverage denial: Insurers can no longer deny coverage to individuals based on pre-existing health conditions. This ensures that individuals with health issues can still obtain insurance coverage.
Gender equality in insurance rates: The ACA prevents a health insurance company from charging higher premiums based on gender or gender identity.
Preventive care coverage: Many preventive services, such as immunizations, birth control, and cancer screenings, are now provided at no additional cost to the insured. This encourages Californians to seek preventive care and helps reduce overall healthcare costs.
How the ACA and Group Health Insurance Affect Your Business
The responsibilities of California businesses regarding group health insurance under the ACA are dependent on the size of the business.
Employers With 50+ Full Time Equivalent Employees
Employers with 50 or more full-time equivalent (FTE) employees are categorized as applicable large employers, or ALEs, under federal law.
Offering Health Coverage: ALEs are required to offer health coverage to at least 95% of their full-time employees that is affordable and provides minimum value.
Penalties: ALEs failing to meet these requirements may be subject to penalties if a full-time employee enrolls in a qualified health plan and receives a premium tax credit.
Reporting Requirements: ALEs must annually report health coverage information to the IRS and furnish related statements to their full-time employees.
IRS Tools: ALEs can utilize IRS tools to estimate full-time equivalent employees and shared responsibility payments.
Employers With 0-49 Full Time Equivalent Employees
California small business owners with fewer than 50 full-time employees are not required to offer health care coverage to their employees.
Coverage Compliance: However, if small employers offer coverage, it must comply with the requirements of the ACA.
Tax Credits: Small businesses may be eligible for federal tax credits if they have fewer than 25 FTE employees, pay less than $50,000 in average annual wages, and contribute at least 50% of the employee’s premium cost.
Covered California: Small employers can obtain health coverage for their employees through Covered California for Small Business. However, because of the intricacies involved with offering traditional group health insurance, many California small employers wisely choose to consult with an independent group health insurance broker who specializes in getting affordable group health insurance that meets the ACA guidelines.
Independent Health Insurance Brokers Can Help
Navigating the complexities of the ACA and group health insurance can seem overwhelming for business owners. That’s where independent health insurance brokers, like Preferred Insurance California, can provide valuable assistance.
These brokers specialize in helping California small business owners find the right group health insurance plans that meet the ACA’s requirements and fit their specific needs.
An independent health insurance broker can:
Educate Business Owners
Brokers can explain the provisions of the ACA and group health insurance and guide small business owners through the complexities of employer responsibilities, reporting requirements, and compliance with the law.
Shop For the Best Plans
Brokers have access to a wide range of health insurance plans from different carriers. They can help small businesses compare options and choose the plans that offer the best coverage at the most affordable rates—whether these options are within the ACA or from outside Covered California.
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Provide Personalized Support
Brokers work closely with small business owners to learn and understand their unique needs and preferences. They can tailor their recommendations to ensure the chosen health insurance plans align with the business’s budget and employee needs.
Assist With Enrollment and Administration
One of the most significant advantages of partnering with an independent health insurance broker for ACA and group health insurance plans is that brokers can help with enrollment, ensuring the accurate and timely completion of all necessary paperwork. They can also provide ongoing support for plan administration, including adding or removing employees from the coverage and addressing any issues.
By partnering with an independent health insurance broker, small business owners can confidently navigate the complexities of the ACA and group health insurance and ensure that they are providing their employees with the best possible coverage at a budget-friendly cost.
Preferred Insurance: Helping California Small Business Owners Navigate the ACA and Group Health Insurance
The Affordable Care Act has profoundly impacted the responsibilities of small business owners in California. Small business owners must navigate the provisions and ensure compliance with the law. Preview (opens in a new tab)
Working with an independent health insurance broker, such as Preferred Insurance California, can provide invaluable support in understanding the ACA’s requirements, finding the right group health insurance plans, and ensuring compliance with reporting and enrollment obligations.
By partnering with a trusted broker, small business owners can give priority to the health and well-being of their employees while navigating the evolving landscape of healthcare reform in California.
If you are ready to discuss your options for small business health insurance, contact Preferred Insurance today for your free consultation.