January 30th 2015

The Basics of Small Business Health Insurance for 2015
The new year is here and many small businesses are scrambling to puzzle out ObamaCare, the Affordable Care Act, and what it all means for small business health insurance. Many websites advertise "the best small business health insurance" or even the "pros and cons of small business health insurance," when small business owners and operators simply want to be informed! And unfortunately, staying up to date on the latest small business health insurance information has been a challenge with the number of times that the details have changed.



For those who simply want to know the basics as they stand in 2015, read on!

Are you mandated to provide small business health insurance?



The Affordable Care Act mandates that companies with 50 or more full time equivalent (FTE) employees offer affordable health care benefits, or face a tax penalty. [Note: A full time employee is one who works an average of at least 30 hours per week. Part-time employees must also be factored in to the FTE by adding the total hours worked by all part time employees during the month divided by 120.] In addition to offering the benefits themselves, companies must also provide information to each employee about the State's Health Insurance Marketplace.

When will the mandate be enforced?

The mandate has been postponed to be effective in 2016 for companies with between 50-99 employees. However, "Small businesses with more than 100 full-time equivalent employee with average annual wages above $250,000 must provide health coverage to at least 70% of full-time employees starting in 2015 and 95% of full-time employees starting in 2016" (according to the ObamaCare website). Business above this 100 employee mark that do not comply with this mandate will have to pay $2,000 per employee on the year end federal income taxes.



However, if your company has less than 50 FTE employees on average during the year, you may elect whether or not to provide health insurance coverage. A SHOP (Small Business Health Options Program) Marketplace opened online in November of 2014 and enables business of this size to more conveniently enroll in one of many health insurance offerings.

Is there a benefit to providing small business health insurance?

Yes! Aside from aiding employees in securing health insurance and avoid a personal penalty, there is also a Small Business Health Care Tax Credit. To qualify, your company must:

1. Have 25 or fewer FTE employees.

2.Pay an average FTE employee salary of $50,000 or less.

3.Agree to pay at least 50% of FTE employees' premium insurance costs.

4.Offer coverage to FTE employees via the SHOP Marketplace.

 Keep in mind that small business health insurance guidelines, regulations, and timelines may change throughout 2015. However, if they remain stable, all businesses with 50 or more full time equivalent employees (during 2015) will be required to provide insurance in 2016 or face severe penalty.


If small business health insurance has been a confusing mess that you would rather escape by selling your small business, KR Business Brokers can assist you. Find a business broker and take the first steps of selling today. Transversely, if you are excited to jump into a new business venture during this time of change, qualified KR Business Brokers representatives can also guide you in buying.

Rob and Pippa Mundie

Business People Working
With Business People

Give us a call today!