Hi folks Dave Waring here again with fitsmallbusiness.com and today's lesson
of the day in today's video we're going to continue our series on how to hire
and manage with an overview of everything that the small business owner
needs to know about Obamacare since this is a long video I've included a video
table of contents in the description section below this video where you can
jump to the section that's of most interest to you so let's get started
part 1 of this guide introduces the key features of the Affordable Care Act
otherwise known as Obamacare which includes the concept of full-time
equivalent FTE for short the small business health options program shop
exchanges the small business health care tax credit and the employer mandate
after introducing these key concepts part 2 explains how Obamacare will
impact small businesses of different sizes the effects of Obamacare differ
depending on whether you're self-employed employee fewer than 25
people employed 25 to 50 people or employ more than 50 people this section
will explain what to expect based on the size of your small business part 1 the
key features of Obamacare understanding the size of your small business the
impact of Obamacare differed depending on the size of your small business there
are four size categories number one is self-employed number two fewer than 25
employees number three 25 to 50 employees and number four more than 50
employees under Obamacare the size of your small business is based on the
number of full-time equivalent employees or FTEs for short FTEs are calculated by
adding the total number of full-time employees those who work 30 hours per
week or more plus the total number of part-time employee hours divided by 30
for example if your company has 20 full-time employees that work 40 hours
per week plus another 10 part-time employees that work 20 hours a week you
would calculate your FTEs as follows 20 full-time employees plus 200 part-time
hours divided by 30 equals twenty six point six six FTEs in
this case your business would fall into the twenty five to fifty employee range
it is important to note however that seasonal employees contractors and
business owners do not count towards the FTE total part-time employee hours can
be average from anywhere between a three and twelve month span to determine FTE
shop exchanges the small business health options program the shop exchanges or
small business health options programs our marketplace is designed specifically
for small businesses as of october 1st 2013 you can access the shop exchanges
through your state's health insurance marketplace the shop exchanges give
small business employers greater purchasing power and allow them to
choose from a wide variety of qualified health plans or q hp's for short that
meet their budgets for 2014 the shop marketplace will be open to employers
with 50 or fewer FTEs and will expand in 2016 to include those with 100 or fewer
FTEs the shop exchanges offer small business owners a number of benefits
such as the ability to control the coverage you offer and how much you pay
toward employee premiums they also enable small business owners to compare
health plans online and qualify for small business health care tax credits
which are discussed in more detail later in this video if you use the shop
exchange you must offer coverage to all of your full-time workers and in most
states at least 70% of your employees must enroll in the shop exchange I have
included some additional resources on shop exchanges in the resources link
below this video the small business health care tax credit under the
Affordable Care Act tax credits are available for small businesses that
purchase insurance through the shop exchange on a sliding scale depending on
the number of employees and the average annual wages the largest tax credits are
available to small businesses with fewer than 25 FTEs
currently these businesses can apply for tax breaks of up to 35 percent or 25
percent for non profits of their contribution to employees premiums in
2014 the tax credit amount will increase to 50 percent for small businesses and
35 percent for nonprofits in order to qualify businesses must pay for at least
50 percent of their employees premiums and their workers average annual wages
cannot be more than $50,000 a year in order to qualify for tax credits
insurance must be purchased on the affordable insurance exchange for at
least two years the credits can be claimed on your income tax return within
an attached form eight nine four one which must show calculations for the
credits employers can also use the early retiree reinsurance program to access
financial help for plans that provide health insurance to retirees ages 55 to
64 in order to gain a greater understanding of your potential health
care tax credits see the small business health care credit estimator which I've
included in the resources link below this video the employer mandate the
employer mandate is a shared responsibility penalty fee for all
employees with more than 50 FTEs that do not provide health care to their
employees this fee does not begin until 2015 and does not apply to small
businesses with fewer than 50 FTEs for those small businesses with more than 50
FTEs the penalty is $2,000 per employee or $3,000 if employees purchase health
insurance through the exchange with premium credits however the first 30
FTEs are exempt from this penalty in other words if your small business has
55 FTEs you would only be liable for a penalty for 25 of these FTEs for a
visual explanation of how the employer mandate applies to you see the flowchart
included in the resources link below this video new costs for some small
businesses while Obamacare will reduce costs for the majority of small
businesses there are a few small costs increases to be aware of
first there is a $63 pre-existing conditions fee which employers can pass
on to employees second if your business makes more than 250,000 in taxable
profit you will have to pay a point nine percent increase on the current Medicare
Part A tax small businesses making less than two hundred and fifty thousand
dollars in taxable profit are exempt from this Medicare tax increase part two
Obamacare in your business the impacts of the Affordable Care Act differ
according to the size of your small business this section will help you
identify how Obamacare impacts your business based on your number of FTEs in
order to calculate your business's FTEs see part 1 of this video titled
understanding the size of your small business self-employed if you're
self-employed meaning you have no employees other than yourself you can
get coverage through the individual market of your state's health insurance
marketplace you will not use the shop exchanges but rather the individual
marketplace please see the SBA link included in the resources link below
this video for a comprehensive explanation of your options and
obligations as well as where you can go to purchase insurance fewer than 25
employees small businesses with fewer than 25 employees receive the greatest
benefits from Obamacare if your business has fewer than 25 employees your
business is exempt from the employer mandate and you can now purchase health
insurance plans through the shop exchanges if you purchase an insurance
plan through the shop exchange you may qualify for tax breaks of up to 35
percent or 25 percent for non profits of your contribution to employees premiums
these tax credits will increase to 50 percent for small businesses and 35
percent for nonprofits in 2014 employers with less than 25 full-time workers each
making less than $50,000 a year may also be eligible for cost assistance via
premium tax credits if they use the shop exchange be aware that if your business
does at least five hundred thousand an annual
dollar volume of business you are required to notify your employees about
the new health insurance marketplace inform them that they may be eligible
for a premium tax credit if they purchase coverage through the
marketplace and advise them if they purchase a plan through the marketplace
that they may lose the employer contribution if any to any health
benefits plans offered by the employer I've included a link with more
information for employers with fewer than 25 employees in the resources link
below this video 25 to 50 employees small business employers with 25 to 50
FTEs are exempt from the employer mandate but will not have access to the
same tax credits as those small businesses with fewer than 25 employees
tax credits are available for the small businesses on a sliding scale
depending on the number of employees and average annual wages so use the small
business health care credit estimator included in the resources link below
this video to see if your business qualifies be aware that if your business
does five hundred thousand an annual dollar volume of business you are
required to notify your employees about the new health insurance marketplace
inform them that they may be eligible for a premium tax credit if they
purchase coverage to the marketplace and advise them that if the the employee
purchases a plan through the marketplace they may lose the employer contribution
if any to any health benefits plan offered by the employer
I've included a link with more information for employers with 25 to 50
FTEs and the resources link below this video more than 50 employees small
business employers with more than 50 FTEs can purchase health insurance
through the shop exchanges and are not exempt from the employer mandate which
takes effect in 2015 please see part 1 of this video for more information
regarding your obligations relating to the employer mandate furthermore your
business will not have access to the same tax breaks as those small
businesses with fewer than 25 employees tax credits are available for small
businesses on a sliding scale depending on the number of employees and average
annual wages so use the small business health care credit estimate
included in the resources link below this video to see if your small business
qualifies be aware that if your business does at least five hundred thousand an
annual dollar volume of business you were required to notify your employees
about the new health insurance marketplace inform them that they may be
eligible for a premium tax credit if they purchase coverage through the
marketplace and advise them that if they purchase a plan through the marketplace
they may lose the employer contribution if any to any health benefits plan
offered by the employer I've included a link with additional
information for employers with 50 or more FTEs as well as some other
resources about Obamacare in the resources link below this video that's
our video for today if you have any questions or comments please feel free
to leave them in the comment section below for more great advice on how to
start and run a successful small business also be sure to visit us at
fitsmallbusiness.com today thanks for watching
you