Business rules for the Affordable Care Act, part III

It’s widely understood that small businesses are the backbone of the U.S. economy, with small businesses creating two out of every three jobs in America.

The government has various standards it uses to define a small business, especially when it comes to awarding federal contracts, but under the Affordable Care Act (ACA, or Obamacare), a small business is one with fewer than 50 FTE (full-time equivalent) employees. As reported here last month, businesses in this category will NOT be subject to a fee, the Employer Shared Responsibility Payment (ESRP), if they do not offer “a defined level of (health insurance) coverage to full-time employees and their child dependents (up to age 26).” Delayed from January 2014, the ESRP kicks in on January 1, 2015 for “large” employers with 100 or more FTEs and in 2016 for “medium” businesses with 50 to 99 FTEs.

Under the ACA, small businesses are divided further into two categories, those with 26 to 49 FTEs and those with up to 25 FTEs.

Obamacare created the Small Business Health Options Program (SHOP), a part of each state’s Health Insurance Marketplace, where businesses with less than 50 FTEs could start shopping for group health plans beginning October 1, 2013. The online portion of SHOP is set for opening on November 15 this year, and businesses with up to 100 FTEs can start using it in 2016.

Additionally, the smallest of small businesses, those with 25 or fewer FTEs with average annual wages below $50,000, may qualify for inflation-adjusted tax credits to help pay for employee health insurance premiums. These tax credits are retroactive for any tax year since 2010.

Unless something drastic happens, Obamacare is the law of the land. If you own a small business, I urge you to learn everything you can about it. Online, good places to start are and



BIO: Baxter Troutman is founder and chief executive officer of Labor Solutions, a staffing company with offices in Bartow, Winter Haven, Lake Wales, and Arcadia. A citrus grower who served in the Florida House of Representatives, Troutman understands the challenges and concerns of today’s farmer.

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