Affordable Care Act Impact on Small Businesses

The Affordable Care Act, commonly referred to as Obamacare, has a phased implementation plan that includes changes in requirements year over year but what is the affordable care act impact on small businesses? It is important to fully understand the requirements placed on businesses up to 100 Full Time Employees so you avoid any penalties for non-compliance.

In 2015, any business with 100 or more full time employees will need to start providing health benefits to at least 70% of those full time employees, and will be required to offer it to 95% in 2016. Businesses with 50-99 full time employees will need to start insuring workers in 2016.

If your business has less than 50 full time employees, you can use the Small Business Health Options Program created by the Affordable Care Act. If the business has less than 25 full time employees, health care tax credits are retroactively available to 2010.

It is important to know that taxes and tax credits are based off of the number of full time employees and their annual average wages, not just the number of full time employees. If your business has fewer than 25 full time employees making less than $50,000, you may qualify for tax credits to help pay for employee premiums.

If your business is required to insure it’s full time workers but doesn’t, they will pay a penalty of $2,000 per employee on their year end federal income taxes. And the fee is even higher if the employee gets health insurance subsidies through the marketplace.

With so many rules and regulations regarding the Affordable Health Care Act and it’s affect on your business, it is critical that you align yourself with an Accounting Firm that not only understands the rules and regulations, but also has the knowledge to help you navigate the complexities as cost-effectively as possible.

Randolph Business Resources can help you determine the most profitable manner to compensate your employees while remaining in compliance with the law.