The passage of the Affordable Care Act (ACA), or Obamacare, certainly reformed our system of healthcare in the United States. Many private health insurers were forced to change policies to become more inclusive and affordable in keeping with ACA rules. In addition, the healthcare marketplace was formed, including state exchanges, helping to provide cost assistance to millions of previously uninsured Americans in need.
The good news is that this reform provided for new and better options for many U.S. citizens and other qualifying residents. In most cases, however, the best and most affordable option for health insurance coverage is to obtain it through your place of employment, if your employer offers insurance coverage as part of a benefits package. What are your options, though, when it comes to employer-sponsored health insurance coverage?
Obamacare Employer Mandate
Under ACA rules, all businesses with 50 or more full-time employees (FTE) are required to provide health insurance benefits to at least 95% of FTE, as well as dependents under the age of 26. Although the deadline for compliance was pushed from the original deadline of 2014 to 2015/2016, employers failing to provide mandatory coverage by the new deadline will face severe penalties for failing to comply.
It breaks down like this. Businesses with 100 or more FTE had until 2015 to provide insurance coverage for 70% of FTE and until 2016 to provide coverage for 95% of employees, while small businesses of 50-99 FTE had until 2016 to provide coverage. Businesses with fewer than 50 FTE are not subject to this mandate, but that doesn’t mean these small businesses don’t have options to provide health insurance benefits for employees should they choose to do so.
Any health insurance benefits offered under the Obamacare employer mandate must meet standards for minimum essential coverage or the business could face penalties for failing to comply.
The Small Business Health Options (SHOP) marketplace is an extension of the ACA healthcare marketplace that specifically caters to the needs of small business owners interested in providing medical, dental, vision and other health benefits to employees. The goal of SHOP is to provide affordable options to small businesses so that they, in turn, can provide affordable benefits to their employees.
SHOP offers a variety of flexible options for employers, including some latitude to choose which benefits will be provided, how much employers will contribute, and whether or not spouses or children will be covered. In addition, businesses with fewer than 25 FTE may also qualify for the Small Business Health Care Tax Credit (covering up to 50% of the cost of premiums) as a way to offset the cost of providing health benefits for employees.
Third-party Health Insurance
Although many businesses large and small have elected to offer health insurance benefits through the healthcare marketplace, some still include a variety of options offered by private, third-party insurance providers. This is only to the benefit of employees, who may now have more options than ever when it comes to choosing the best possible health coverage at an affordable price.