Group Health Insurance

Your Business and The Affordable Care Act – What You Need to Know!

The Affordable Care Act includes many provisions that affect your business, your employees, and your group health insurance coverage as a whole. It is important to understand how your business is affected by these changes and any penalty fees associated with non-compliance. While no employer must offer coverage, larger businesses are required to offer health insurance coverage to its full time employees and dependents that meet certain minimum standards, or pay a tax.

The impact of Obamacare differs depending on the size of your small business. There are four size categories:

  • Self-employed
  • Fewer than 25 employees
  • 25 to 50 employees
  • More than 50 employees

The size of your small business is based on the number of full-time equivalent employees (FTE’s). FTE’S 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 calculate your FTE’S as follows: 20 full-time employees plus 200 part-time hours divided by 30 equals 7.3 FTE’S. In this case your business would fall into the ‘Fewer than 25 Employees’ range.

It is important to note that seasonal employee’s contractors and business owners do not count towards the FT total.

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