How Obamacare's Employer Mandate Affects Small Biz
The U.S. Supreme Court has upheld the Affordable Care Act, commonly called Obamacare, clearing the way for an employer mandate that will require many small businesses to offer employee health insurance or face a penalty.
In a 5-4 decision, the Court found the ACA's individual mandate is constitutional under Congress' taxing power, Reuters reports. The mandate requires individuals to buy health insurance or face penalties beginning in 2014.
That's also when the ACA's employer mandate kicks in. Under the health-care law, businesses will have to:
Offer a minimum level of health insurance to their employees after a 90-day waiting period, starting in 2014. This only applies to businesses with at least 50 employees who work "full-time," meaning at least 30 hours a week, according to Convenience Store News, which covers the retail industry. The health plans offered must comply with existing reforms, including coverage of dependents up to age 26.
If a business chooses not to offer employee health plans, the Affordable Care Act's employer mandate stipulates a $2,000 per-employee penalty beyond the first 30 employees. That may actually be cheaper than offering health coverage, CSN notes.
Comply with new reporting requirements. Businesses with more than 50 employees must report the total cost of their group health-plan coverage on employer W-2 forms. Companies must also increase Medicare withholding for workers making more than $200,000 a year, according to HR consulting firm Mercer.
Small-business lobbying groups were split in their support for the Affordable Care Act and the employer mandate. One group, the National Federation of Independent Businesses, joined the legal fight to challenge the law; the NFIB was strongly disappointed by Thursday's Supreme Court ruling, the Palm Beach Post reports. You can read the Court's entire decision at FindLaw's Courtside blog.
- Affordable Care Act Upheld (FindLaw's Decided)
- The Importance of a Backup Plan: SCOTUS Upholds Individual Mandate (FindLaw's U.S. Supreme Court blog)
- 3 Ways Healthcare Reform Can Affect Small Businesses (FindLaw's Free Enterprise)
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