Obamacare Deadline For Small Businesses

By Steve Barlotta, CPA

In my blog a few months back I wrote that companies with the equivalent of 50 or more full-time workers would now have to provide health care coverage for their employees starting January 1, 2015, or face penalties. Under the original Affordable Care Act, this mandate was set to begin January 1, 2014. But, there is another Obamacare deadline looming that will affect all small businesses regardless of how many employees they have.

The Affordable Care Act created health insurance marketplaces that are set to open on October 1st. These state and federal insurance exchanges are websites where individuals and small businesses can shop for health plans. All companies are required to notify their employees about the Obamacare marketplaces, regardless of their size. Most small business owners are unaware that this requirement even exists. There is also a misconception that if your company has fewer than 50 full-time employees and are too small to be governed by the health-care mandate, the notification requirement does not apply. It is not yet clear how this will be enforced, but penalties for businesses that are not in compliance could reach $100 per worker per day.

So the question is, “how can I comply with this requirement in a cost-effective, time-saving manner”. On its website the U.S. Department of Labor has posted information about the employer notification. But, more importantly, it has provided template notices that can be used both by employers who offer insurance and those who do not offer insurance. These notices, in PDF format, can be downloaded, filled out, and printed. Based on what I have read, the employer’s obligation is met if the notice is put in the U.S. mail or distributed electronically. Also, I don’t see any requirements that the employer needs to get the employee’s signature indicating that they have received the notice. For those employees who are hired after October 1, the notice must be given to them within 14 days of their start date with the company.

I realize this is another administrative headache for companies that are already besieged by government red-tape. But, I feel it’s real important to distribute these notifications about the Obamacare exchanges to your employees prior to October 1st.