The U.S. Small Business Administration (SBA) has started a new article series ( to educate small business owners on what they need to know about the Affordable Care Act which is scheduled to become fully effective January 2014. The series addresses common misperceptions about the ACA, and one post discusses the top three things small business owners need to know about the Act:

1. Exemption and Tax Credit for Businesses with Less Than 25 Employees. Businesses with fewer than 25 employees are not required to provide health insurance under the Affordable Care Act. However, those businesses that choose to provide employee health insurance anyway are offered tax credits of up to 35%. Qualifications to get the tax credit include:

  • Business employs fewer than 25 full-time employees
  • Business contributes 50% or more toward health insurance premiums for employees
  • Average annual wage is less than $50,000

This tax credit will increase to 50% in 2014 and will be available to small businesses that participate in the Small Business Health Options Program (SHOP) Exchanges.

2. Affordable Insurance Marketplaces for Businesses with Fewer Than 50 Employees. Businesses with less than 50 employees will not be required to provide employee health insurance.  Beginning in 2014, these businesses will have access to the Small Business Health Options Program (SHOP) Exchanges, a competitive health insurance marketplace for small employers to find affordable coverage for employees. Open enrollment for SHOP begins Oct. 1, 2013.

3. Businesses with 50 or more Employees – Employer Shared Responsibility Provisions. Beginning in 2014, businesses with 50 or more full-time employees that do not offer employee health insurance may be subject to what is called an “employer shared responsibility payment” if at least one full-time employee (someone who works an average of 30+ hours per week) receives a premium tax credit to purchase coverage in an insurance Marketplace.

If you’re a small or mid-size business owner, call us today to schedule your comprehensive LIFT (legal, insurance, financial and tax) Foundation Audit. Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.