The Affordable Care Act (ACA) Basics

The Affordable Care Act (ACA) has required new parameters for small businesses to hire employees and provide health insurance to Full-Time Employees (FTEs). The IRS is geared up to administer severe penalties if companies are not compliant. The most recent updates to the ACA include the following dates for employer mandate compliance:• On January 1, 2015, Businesses with 100 or more full-time employees and full-time equivalent employees (FTEs), must offer health insurance coverage to 70% of their full-time 
employees and their eligible dependents or face the prospect of a penalty• On January 1, 2016, Businesses with 100 or more full-time employees and full-time equivalent employees (FTEs), must offer health insurance coverage to 95% of their full-time employees and their eligible dependents or face the prospect of a penalty• On January 1, 2016 Businesses with 50-99 full-time employees and full-time equivalent employees (FTEs) that meet certain requirements must offer health insurance coverage to at least 95% of their full-time employees• Businesses with fewer than 50 full-time employees and full-time equivalent employees (FTEs) are exempt from the ACA’s employer mandate. 
However, the IRS is closely reviewing what it means to be a full-time equivalent employee, read our post “Defining an FTE” for more information.• There is support for small businesses: The ACA provides a tax credit of up to 50% to certain small businesses with no more than 25 full-time employees and FTEs that choose to offer health insurance to their employees.