Affordable Care Act (ACA) Frequently Asked Questions
Does health care reform allow people to keep their current
- Yes. Nothing in the new law requires individuals to
terminate coverage that they had on the date the law was passed.
Am I required by law to offer health coverage to my
- The health care reform law technically does not require
companies to offer health coverage to their employees. Beginning in
2014, large companies that do not offer a minimum level of coverage will be
subject to penalties if any of their employees receive government subsidies for
health coverage through an exchange. Large companies will also be subject to
penalties if they do offer the minimum level of coverage and any employee still
receives subsidized coverage through an exchange. Those penalties will not
apply to small employers having fewer than 50 full-time equivalent employees
on business days in the prior calendar year.
What are the penalty amounts for large employers that don't
- Large employers that do not offer coverage will be subject
to an annual penalty of $2,000 per full-time employee, excluding the first 30
employees, if any of their full-time employees receive subsidized coverage
through an exchange.
What are the penalty amounts for large employers that offer
coverage and have employees who receive subsidized coverage through an
- Employers are subject to a penalty of $3,000 for each
full-time employee that receives subsidized coverage through an exchange. The
maximum penalty is the amount equal to $2,000 times the number of full-time
employees, excluding the first 30 employees.
What is the small business tax credit and how do I know if I
- Beginning with the 2010 tax year, tax credits were available
to qualifying small businesses that offer health insurance to their employees. A business qualified for the credit if it covered at least 50 percent of the
cost of health care coverage for workers, pay average annual wages below
$50,000 and have less than the equivalent of 25 full-time workers.
- The size of the credit depends on your average wages and the
number of employees. For tax years beginning in 2010 through 2013, the
maximum credit is 35 percent of the employer's premium expenses that count
toward the credit. The full credit is available to firms with average wages
below $25,000 and less than 10 full-time equivalent workers. The credit phases out
gradually for firms with average wages between $25,000 and $50,000 and for
firms with the equivalent of between 10 and 25 full-time workers.
What if my small business doesn't offer insurance today, but
I choose to start offering insurance this year? Will I be eligible for
these tax credits?
- Yes. The tax credit is designed to both support those small
businesses that provide coverage today as well as those that newly offer such