Starting in 2014, the Affordable Care Act, otherwise known as “Obamacare” will require small businesses with more than 50 full-time employees to purchase health insurance for their workers or be forced to pay a penalty. Many small business owners and employees are understandably confused about Obamacare and what it means to them.

CNN Money notes the first round of requirements, impacting companies with more than 50 employees, only applies to roughly 3 percent of America’s small businesses. As of 2010, there were approximately 5.7 million small employers in the country, with less than 500 workers. Around 97 percent of these companies had less than 50 employees, which equates to a total of around 200,000 companies.

According to the CNN Money article, 96 percent of the small businesses impacted already provide health insurance to their employees, though some may be required to increase coverage limits to comply with Obamacare rules.

What the Affordable Care Act Means to Small Businesses ─ a Brief Overview
Here’s a brief overview of the rules and regulations of Obamacare specific to small businesses, explained by ObamacareFacts.com:

• Companies with more than 50 full-time workers with average annual wages above $250,000 must provide health insurance coverage to full-time workers starting in 2015. This is sometimes called the “employer mandate.”
• The Small Business Health Options Program (SHOP) opened on October 1. This is a website where small businesses with less than 50 full-time employees can shop for group health plans. SHOP will open up for those with 100 or less full-time worker in 2016.
• Businesses with less than 25 full-time employees, with average annual wages below $50,000, can receive tax credits to help make employee health insurance premiums more affordable.
• Companies earning more than $250,000 in annual profits will pay a 9 percent increase on the Medicare Part A tax. The employer and employees earning $200,000 individually (or $250,000 family) will each pay a 4.5 percent increase, effectively splitting the tax. Employees earning less than the annual income requirement will not be required to pay the tax.
• Businesses with more than 50 full-time employees will be required to inform employees about their state’s health insurance marketplace.

Experts in providing the highest quality back-office, funding and employer of record service to recruiters throughout the United States, ECS understands the daily challenges faced by small businesses across the country. Looking for help? Contact us today for more information on how a partnership with ECS can benefit your company today!