The Affordable Care Act: Dates Every Small Business Owner Should Know
by Meredith K. Olafson, Community Moderator
- Created: July 16, 2013, 2:03 pm
- Updated: July 16, 2013, 2:03 pm
At the U.S. Small Business Administration, we know that health is one of the top concerns for small business owners across the country. Since the Affordable Care Act passed in 2010, the Obama Administration has been hard at work implementing key policies that are already helping make health care more affordable and accessible for America’s small business owners--and more progress is on the way.
Many of the provisions of the Affordable Care Act are already in effect, and the bulk of new regulations designed to help Americans access affordable quality healthcare will be in place by 2015. As these policies begin to help improve America’s health care market, it’s important for small business owners to stay informed, get the facts, and learn more about what the Affordable Care Act means for your business.
Below is a breakdown by year of key policies in the Affordable Care Act that affect America’s small businesses.
2010: The Affordable Care Act Becomes Law
- Many small businesses become eligible for new federal tax credits for eligible businesses worth up to 35% of the employer’s contribution to the employees’ health insurance to help them provide insurance benefits to their workers. Small non-profit organizations may receive up to a 25% credit.
- A new Patient’s Bill of Rights goes into effect, protecting consumers from the worst abuses of the insurance industry.
2011: The Affordable Care Act Holds Insurance Companies Accountable
- To ensure premium dollars are spent primarily on medical care, the law’s “80/20” rule requires that at least 80% of premium dollars collected by insurance companies for individuals and small employers must be spent on benefits and quality improvement.
- Another tough reform requires insurance companies to publicly justify rate increases, holding insurers accountable to the small businesses they serve, which has led to a sharp decline in double-digit rate hikes.
- To date, these two protections alone have already saved small businesses and consumers more than $2 billion.
2012: The Affordable Care Act Reduces Administrative Costs and Burdens
- Effective in October, the law institutes a series of changes to cut costs and improve care by standardizing billing and requiring health plans to begin implementing rules for the secure, confidential, electronic exchange of health information.
2013: Open Enrollment in the Marketplaces Begins
- On October 1, individuals and small businesses can buy affordable benefit plans by enrolling in the new Individual and Small Business Health Insurance Options Program (SHOP) Marketplace. For the first time, individuals and business owners are able to make side-by-side comparisons to find a plan that fits their budget and that’s right for their families, businesses, and employees.
2014: The Marketplaces Open
- Individual and SHOP Marketplaces open in all 50 states and the District of Columbia on January 1.
- Tax credits for eligible small businesses participating in the SHOP Marketplace go up to 50% (35% for non-profits). Individuals and the self-employed may qualify for premium tax credits and cost sharing subsidies as well.
- Effective January 1, self-employed individuals must have health insurance that meets the minimum essential coverage standards, qualify for an exemption, or be subject to an assessable payment.
2015: Employer Shared Responsibility Provisions Take Effect
- Starting in 2015, employers with 50 employees or more full-time or full-time equivalent (FTE) employees must offer minimum essential coverage to their full-time employees or be subject to a potential Employer Shared Responsibility payment.
About the Author
Meredith K. Olafson is Senior Policy Advisor for the U.S. Small Business Administration where she oversees the agency's education and outreach efforts around health care and the Affordable Care Act.
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This blog is provided for informational purposes only and is not intended as legal or tax advice. Readers should consult their legal or tax professionals to discuss how these matters relate to their individual business circumstances.