Affordable Care Act
If you’re a small business owner with employees, knowing the Affordable Care Act (ACA) rules is important so you know where you stand with the law. Employer rules under the ACA may seem complicated, but knowing the ins and outs of the rules that apply to you could be seriously beneficial to your business. We’ll explore the Affordable Care Act Employer Mandate and help you understand how this affects you and your responsibility to your employees.
The employer shared responsibility provision under the Affordable Care Act Employer Mandate became officially effective in 2015. Under this provision, certain applicable large employers (ALEs) are subject to employer shared responsibility provisions. This means ALEs must offer affordable health coverage to employees, and the insurance must provide “minimum value” to employees and their dependents. As an ALE, if you do not provide such benefits to your employees, then you might have to pay an employer shared responsibility payment to the IRS.
The Affordable Care Act employer mandate generally applies to employers with 50 or more full-time employees, according to the IRS. This means that in most cases, these businesses must offer health insurance to their employees, or make an employer shared responsibility payment to the IRS.
For many small businesses (fewer than 50 full-time employees), health insurance is not a requirement under the ACA. However, if you do choose to offer health care to your small business employees, the plan must meet the standards of minimum essential coverage outlined by the Affordable Care Act.
As a small business owner, in some sense you have more flexibility than companies deemed “large businesses” with 50 or more full-time employees. The Affordable Care Act employer mandate might not even apply to you if have fewer than 50 employees. But there still are some employer rules under the ACA that any employer should know about. Listed below are a few rules that might affect how you go about offering insurance to your employees.
To read more about how small businesses are affected by employer rules under the ACA, read this article.
This article about the Affordable Care Act Employer Mandate is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.