Q and A: What businesses should know about Obamacare
Editor's note: Northeast Delta Dental recently gathered a group of expert volunteers from health-care companies, government agencies and businesses to present a conference on the Affordable Care Act at Southern New Hampshire University.
The five questions and answers below, courtesy of Northeast Delta Dental CEO Tom Raffio, were culled from the most common queries of the 160 people who attended the session.
None of the information presented here is to be relied on as legal or tax advice. It is general information; the facts of a particular situation could make the information below inapplicable or could change the analysis.
1. QUESTION: Can an employer survey employees about their anticipated medical insurance plans needs?
ANSWER: An employer may survey its employees as to whether they will select the option of employer sponsored coverage or not. Any questions that go beyond that should be drafted carefully so as not to seen as discriminatory. Employers should consult with counsel prior to formulating and distributing any employee survey.
2. Which employers can use the Small Business Health Options Program (SHOP)? Which businesses can get health premium tax credits or subsidies? How do you get them and where can small businesses get more information on that?
Employers can use the SHOP to purchase medical and dental coverage for employees as long as the company has no more than 50 full-time or full-time equivalent (FTE) employees, whether they are private, nonprofit or governmental entities.
Starting in 2016, eligible employers will grow to include those with up to 100 full-time or FTE employees.
Employers with fewer than 25 employees can apply for the Small Business Health Care Tax Credit as long as their employees' average wage is under $50,000 and the employer pays for at least 50 percent of the full-time employees' premium costs.
The tax credit is worth up to 50 percent of the employer's contribution toward employees' premium costs (up to 35 percent for tax-exempt employers) and may be claimed for two years.
To claim this tax credit, an employer must have purchased coverage on the SHOP Marketplace and will need to get an official eligibility determination letter from the SHOP Marketplace.
The credit is claimed when filing corporate annual federal income tax returns. That is the only "subsidy" for employers.
More information on the Small Business Health Care Tax Credit and the SHOP Marketplace is available at www.sba.gov and www.irs.gov.
3. I live in New Hampshire, but my business is in Vermont. Where can I purchase health and dental coverage for myself and my employees?
To use a particular state's SHOP Marketplace, you must office or employee work site within that SHOP's service area. In this case, this employer could open a SHOP account in Vermont on the State's Marketplace, VermontHealthConnect.gov, and the plan could cover the company's employees, regardless of in which state they live.
Alternatively, employees (and the owner) can purchase coverage on the Individual Marketplace operating in their state of residency.
The private market remains another option for the purchase of group or individual health and dental coverage.
Note that small employers can only claim the Small Business Health Care Tax Credit if they've purchased coverage on the SHOP Marketplace, and individuals and families can only claim the Health Premium Tax Credit to help cover the cost of their premiums by purchasing coverage on the Individual Marketplace.
4. I have six employees. One employee is covered on a spouse's plan and two want to opt out of coverage. With only slightly more than half of us looking for coverage, I can't meet the state's plan minimum participation rate of 75 percent. What are our options?
Because this employer has fewer than 50 full-time equivalent employees, she is eligible to purchase coverage on the SHOP Marketplace. It appears that not enough employees will take the coverage offered by the employer to meet the 75 percent minimum participation rate medical carriers are permitted to require of groups under New Hampshire state law.
However, this employer has the option of enrolling in a SHOP plan between November 15 and December 15 each year, during which time the minimum participation rate is waived to allow more employers with lower participation rates to offer a SHOP plan.
In addition, depending on the reason that two employees are opting out, there may be valid waivers applied by the carrier (i.e. the individuals are eligible for subsidies on the individual exchange) so that their lack of participation will not count against the employer for purposes of minimum participation. Groups should check with their brokers/carriers for detail.
5. When will brokers have 2015 plan details in order to advise small employers? Do plans purchased through brokers cost more?
The New Hampshire Insurance Department and the U.S. Health and Human Services Department will give final approval of all the plans to be offered on the New Hampshire Health Insurance Marketplace for 2015 coverage by early November 2014.
Once approved, carriers may share plan details at their option, but all approved plans will be displayed on the SHOP Marketplace no later than Nov. 15, 2014, the start of the 2015 Open Enrollment period. Premiums for plans offered on the Marketplace are the same with or without the help of agents or brokers as generally carriers pay the brokers for plans sold.