March 31 is coming! If you haven’t been living under a rock, you probably recognize that date as the deadline to sign up for health coverage under Obamacare--or risk incurring a penalty for going without it. Yet despite the borderline hysteria in the media, the average small business owner really needn’t worry about this dreaded date at all. Here’s the lowdown:
For small businesses, with fewer than 50 full-time employees:
March 31 is the signup deadline for individuals, but small businesses that want to purchase group coverage through the federal or state-based SHOP marketplaces can enroll in plans at any time throughout the year. If you enroll before the 15th of any month, coverage begins the first of the following month. For enrollments submitted after the 15th, coverage begins a full month later. (For example, if you enroll between April 16 and April 31, your coverage would begin on June 1.) Note that you can’t yet enroll online for SHOP plans on the federally run Healthcare.gov site or many of the state marketplaces. You’ll have to submit a paper application, go through an agent or broker, or deal directly with the insurer offering the exchange-based plan you want. There is no penalty for businesses with fewer than 50 employees that do not offer health coverage for workers.
For businesses with 50 to 99 employees:
Thanks to recent delays, you now have until 2016 to comply with the employer mandate to provide health coverage or pay a penalty. Under the original ACA rules, you would have had to be in compliance starting January 2014. So, breathe.
For businesses with 100 or more employees:
You now have until January 2015 to comply with the employer mandate, which means you’ll probably want to start your open enrollment process by October 2014. Under recently issued transitional rules, you’ll have to offer coverage to 70 percent of full-time workers in 2015 to avoid fines, rather than the 95 percent required under early rules.
The March 31 deadline could be important for your employees if they are not already covered by a company health plan or a family member’s plan. Except for those with a valid hardship exemption, people who don’t sign up for coverage by the end of the month--either through the exchange or in the private market--will face a tax penalty equal to up to 1 percent of their adjusted gross income. If any of your employees are in this boat, a friendly reminder might be in order. If you are a sole proprietor--or not covered by a company health plan--the rules for individuals apply to you, too.