Healthcare Compliance for the Smallest Businesses

While the tax burden on business owners promises to be painful; the compliance burden for small employers is minimal with a few traps.

There are at least four size thresholds in the 2010 Healthcare law with different requirements for each size of employer. But if you employ fewer that twenty-five employees (full-time-equivalent employees) you need to know which regulations affect your operations and which do not.

  1. If you offer healthcare:
    1. Do not discriminate. If your plan discriminates in favor of highly-compensated employees the penalties starting in 2014 are ruinous $100 per day per employee.
    2. You may qualify for a credit. If the average annual wage of the company is $50K or less you are eligible for a credit. (After 2014, you are only eligible for the credit if the insurance is obtained through your state health care exchange (online marketplace).)
  2. If you do not offer healthcare (and have fewer than 25 FTE employees) the 2010 healthcare reform laws do not apply to you. Remember that the aggregation rules mean that you cannot chop your company into small segments to game the thresholds.

Employers with more than 50 FTE employees have additional regulations and a possibility for penalties but the penalty for not providing any insurance starts to effect employers with more than 100 employees.