In our September interview Dennis Hernreich discusses the Affordable Care Act.

Q. What is the general requirement on small businesses as it pertains to the Affordable Care Act?

A. The first requirement is the Notice to Employees. This notice must include:
– new Health Insurance Marketplace exists
– a tax credit may be available if health coverage purchased through the Marketplace
– employees may have to forfeit employer contributions toward health coverage if coverage bought on the Marketplace

Q. What is a Summary of Benefits and Coverage Disclosure (SBC) and is this something I have to also do if I am a small business?

A. Employers are required to provide employees with a standard Summary of Benefits and Coverage designed to explain what the plans cover and what it costs for employees to gains better understanding and properly assess what their various options are for buying health coverage.

Q. What is the general requirement on small businesses as it pertains to the Affordable Care Act?

A. The first requirement is the Notice to Employees. This notice must include:
– new Health Insurance Marketplace exists
– a tax credit may be available if health coverage purchased through the Marketplace
– employees may have to forfeit employer contributions toward health coverage if coverage bought on the Marketplace

Q. What is a Summary of Benefits and Coverage Disclosure (SBC) and is this something I have to also do if I am a small business?

A. Employers are required to provide employees with a standard Summary of Benefits and Coverage designed to explain what the plans cover and what it costs for employees to gains better understanding and properly assess what their various options are for buying health coverage.

Q. I read that there is now additional Medicare Withholding on Wages for high earners?

A. The employee portion of the Medicare tax has increased from 1.45% to 2.35% on employees earning over $200,000 for single filers and $250,000 for married filing a joint return.

Q. Have waiting periods changed? In the past, they seemed to be anywhere from 30 days to six months.

A. Group health plans may not impose a waiting period greater than 90 days to become eligible for health coverage under the plans. ACA coverage mandates benefit small business:
– insurers must spend at least 80% of premium dollars on medical care costs
– insurers must disclose and justify premium hikes of 10% or more
– insurers cannot vary premiums or deny coverage based on pre-existing conditions
– insurers cannot charge higher rates based on gender or age
– must pool risks across small groups creating larger spools like large businesses
– must not have annual dollar limits
– must offer plans that provided a core package of “essential health benefits” equal to typical employer plans in the state

Q. And what are the Reporting Requirements?

A. W-2 reporting to include the annual cost of employer-provided coverage for each employee. Employers considered subject to Employer Shared Responsibility provisions must file must report certain information regarding health coverage to individuals pursuant to Sections 6055 and 6056.

THIS IS NOT LEGAL NOR FINANCIAL ADVICE

Dennis Hernreich is the owner of Suncoast CFO Solutions, along with his wife Sheri. Suncoast CFO Solutions provides financial, operational and strategic management solutions for small to mid-market businesses. Dennis has had an extensive 35-year career serving public and private companies as the key financial and/or operating officer of the business.