As a business grows so does its needs. A small group can quickly grow into a large team. When this happens small business owners must start preparing their business to provide more than just a position to earn income. Once a company reaches 50 or more full-time employees, the business must offer a form of healthcare or pay penalties. Preparing for the options of healthcare is the best research a small business owner can do for the company. Here is a quick reference guide for businesses looking for some answers about the Affordable Care Act (ACA).


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When does a small business have to start providing healthcare to its employees?

There are different law requirements for each business classification. Outside of being a special business, if an organization can be identified as health insurance issuers, a self-insuring employer of any size, or an employer with 50 or more full-time (or full-time equivalent), then the owner should start researching and preparing to offer healthcare.

Providing employees with the correct information

Once a business has decided how to provide healthcare, there are a new set of requirements every small business owner must meet. By providing each employee with the Summary of Benefits and Coverage disclosure rules, owners can easily communicate with the employees about health care options. By providing this information, employees can make an educated decision on how to achieve healthcare coverage.

Flexible spending

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Another option owners can provide to employees is flexible spending. Employees have an option to deposit payments of pre-taxed income into special accounts called Flexible Spending Accounts (FSA). Under the ACA, employees cannot contribute more than $2,550 into an FSA in a year, not including employer contributions. Employees have two options on how to carry over unspent FSA funds. There are several incentives for both the employee and the employer to help ease the cost of healthcare coverage.

Providing tools for a healthy lifestyle can save money

The new laws of the ACA have increased the amount of coverage reductions for employees if they are participating in wellness programs. These programs are part of the incentives to help reduce the cost of healthcare coverage. Through these programs, employees can earn up to a 30 percent decrease in coverage costs, up from 20 percent last year. These programs provide tools for employees to live healthy lives inside and outside of work.

Prepare for healthcare coverage as a small business owner

It is never too early to start researching how a small business can offer healthcare coverage. There are a lot of options so business owners should do their best to research ahead of time before requirements are due.


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This article was written by Rick Brown for CBS Small Business Pulse.