Unfortunately, most of the media coverage of the Patient Protection and Affordable Care Act has focused on mid-sized to large employers, who face more requirements than much smaller ones. If your company employs fewer than 250 employees, at least one and possibly more requirements under healthcare reform may not apply to you. Before you spend unnecessary time or money, check out these five exceptions to the law.
- You needn’t provide healthcare benefits now. Most employers are not currently required to do so until 2014.
- You may not ever have to provide such benefits. In 2014, most employers with 50 or more workers will be required to provide health insurance coverage for their employees or pay a penalty if they choose not to do so. But if you employ fewer than 50 people, you do not have to provide coverage, and you will not be penalized.
- You must apply for your tax credit. If you have fewer than 25 full-time employees or full-time equivalents (combining part-timers to find the number of people working full time), you may be eligible for the Small Business Healthcare Tax Credit. You will be if (a) you pay at least 50 percent of the cost of your employees’ coverage, and (b) they have average wages of less than $50,000 a year. But you must claim your tax credit. To determine the amount you’re entitled to, consult your accountant and complete IRS form 8941.
- You don’t have to report benefits on your W-2s. Healthcare reform generally requires employers to report the cost of coverage under an employer-sponsored group health plan on employees’ W-2s. But the requirement was optional for all employers in 2011. And it is still optional for companies that will file fewer than 250 W-2 forms for 2012. Reporting will remain optional for smaller employers until further guidance is issued.
- You must provide proper COBRA notice. If you have 20 or more employees and you provide them with group healthcare coverage, they are entitled to continued coverage under COBRA if they retire or are terminated. You can require employees to pay the full cost of such coverage plus a 2 percent administrative charge. But you must notify your plan administrator within 30 days of any employee’s leaving the company so that the administrator can send him or her the proper notification.
Tip: All of this information applies only if the U.S. Supreme Court does not invalidate one or more provisions of the healthcare reform law. Until the justices issue their ruling, which they are expected to do in June, all bets are off.