Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9 pm ET. This is excerpted from my recent interview with Laura C. Roane @InsuranceLady01. Laura is known as The Insurance Lady and specializes in Insurance Planning and Education. Many families and small businesses look to her for advice on health insurance as problems come up. She helps small business owners and individuals feel empowered in making insurance coverage decisions! For more info: www.insurance-lady.com
SmallBizLady: When do Small Businesses need to comply with the new healthcare law?
Laura C. Roane: As of July, the requirement for Small Business to comply with the Affordable Care Act has been changed from January 1, 2014 to January 1, 2015. If you have 50 or fewer full-time equivalent (FTE) employees you’re considered a small business under the health care law. Generally, those employees working 30 hours or more are considered full time employees.
SmallBizLady: What will be the process for Small businesses to acquire health insurance?
Laura C. Roane: There will be choices through The Small Business Health Options Program (SHOP). It is a new program that simplifies the process of buying health insurance for your small business.
SmallBizLady: What are some of the Benefits of using SHOP?
Laura C. Roane: The Small Business Health Options Program will be a “one stop shop”. You will be able to go to the site and compare plans “apples to apples”. It will also be the way a small business can qualify for the Tax Credit.
SmallBizLady: What is the Small Business Tax Credit and how much is the credit worth?
Laura C. Roane: You may qualify for employer health care tax credits if you have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less. Starting in 2014, the tax credit is worth up to 50% of your contribution toward employees’ premium costs (up to 35% for tax-exempt employers).
SmallBizLady: How will Small Businesses qualify for the tax credit?
Laura C. Roane: To qualify for the Small Business Health Care Tax Credit, you must pay at least 50% of your full-time employees’ premium costs. You don’t need to offer coverage to your part-time employees or to dependents.
SmallBizLady: What if I am self-employed or a solopreneur with no employees?
Laura C. Roane: If you’re self-employed and have no employees, you can buy insurance through the individual Health Insurance Marketplace known as Health Care Exchanges.
SmallBizLady: If I’m a solopreneur should I start shopping around for a new plan through the exchanges or is it more cost effective to stay in my current plan?
Laura C. Roane: If you have private coverage already, it cannot hurt to check out the Exchanges to see what they can offer you as well. The Exchanges may have other companies that you may not be aware of that offer coverage in your area. In addition, the rates may be lower. The Exchange may offer a better alternative to you and a more affordable premium along with additional benefits. When you search, make sure you are comparing like plans and benefits. You would not want to make a decision to cancel your current plan if you have not made sure you compared benefits properly. If you are unsure about this, an Agent or Broker can help you. It will always benefit you to shop around and compare benefits and price on The Exchange.
SmallBizLady: Can you explain how the individual exchanges will work?
Laura C. Roane: The Exchanges will have detailed information on the insurance companies, their benefits and rates in your area. You will be able to provide some basic information about yourself and the system will “match” you with the companies and plans that fit you. Based upon the information you supply, the companies that have the benefits you want will display. At that time, you will be able to do a full “apples to apples” comparison of benefits and premiums. There will be an application for you to fill in to apply to the company that best fits your needs.
SmallBizLady: Can you explain the individual and family healthcare subsidy under the Affordable Care Act?
Laura C. Roane: Health insurance companies offering coverage through the Marketplace must lower the amount you pay out of pocket for essential health benefits if your household income is below the following amounts. (Incomes below are based on 2013 numbers. They are likely to be slightly higher in 2014. Amounts are different for each family size, up to 8. Up to $28,725 for individuals, up to $38,775 for a family of 2, up to $48,825 for a family of 3, up to $58,875 for a family of 4, up to $68,925 for a family of 5, up to $78,975 for a family of 6, up to $89,025 for a family of 7, up to $99,075 for a family of 8.
Plans in the Marketplace are separated into 4 different categories: Bronze, Silver, Gold, and Platinum. If you qualify for out-of-pocket savings, you must choose a Silver plan to get the savings. If you qualify for these savings, you’ll get the out-of-pocket savings benefits of a Gold or Platinum plan for a Silver plan price. You can choose any category of plan, but you’ll get the out-of-pocket savings only if you enroll in a Silver plan.
SmallBizLady: What if I offer my employees health coverage already?
Laura C. Roane: If you insure your employees now, you can keep the coverage you have. If you have 50 or fewer full-time employees, you may offer a plan via SHOP instead. Remember, the small business health care tax credit is available only if you get coverage through SHOP.
SmallBizLady: What if I have more than 50 employees?
Laura C. Roane: If your business has 50 or more employees, you are considered a “large business” under the health care law. Several important parts of the law apply to you.
If you have more than 50 full-time equivalent (FTE) employees, you generally won’t be able to use the SHOP Marketplace to offer health insurance to them.
Starting in 2016, all SHOPs will be open to employers with up to 100 FTEs.
SmallBizLady: Can I get help from an Agent or Broker?
Laura C. Roane: You can continue using your current licensed agent or broker to buy health insurance in the SHOP.
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