Healthcare Reform Timeline

Small Employers


What You Need to Know About Healthcare Reform

  1. You are not required to offer health coverage.
  2. You may be eligible for tax credits to help lower your health benefit costs.
  3. You and your employees have more options for buying coverage.
  4. Your health plan benefits will change.
  5. The way premiums are calculated is changing.

1. You are not required to offer health coverage.

If you have fewer than 50 full-time employees or combination of full-time employees and full-time equivalent employees,  you don't have to offer health insurance under the Affordable Care Act. However, the Act defines full-time employees are those who work an average of 30 hours a week or more. Today, some employers consider employees who work less than 40 hours a week to be part-time.

This infographic can help you determine if you are considered a small or large employer. If you are a large employer, please see the large employer page for information about the requirement to offer coverage, which starts in 2015. If you don’t offer health insurance, your employees will need to purchase health insurance on their own to avoid paying the individual penalty that starts in 2014.

2. You may be eligible for tax credits to help lower your health benefit costs.

Small businesses with up to 25 full-time employees may be eligible for a tax credit to offset the cost of providing health insurance to employees. The full tax credit is available for employers with 10 or fewer full-time equivalent employees.

To qualify, small businesses must:

  • Have 25 or fewer full-time equivalent employees.
  • Pay at least 50 percent of employees’ health insurance premiums.
  • Pay annual average wages that are below $50,000 per full-time employee.

The tax credit has been available since 2010, and beginning in 2014, the tax credit will increase to up to 50 percent (35 percent for tax-exempt employees) of whichever is less:

  • The contribution employers made to pay their employees' premiums OR
  • An amount set by the U.S. Department of Health and Human Services

Also, beginning in 2014, you’ll need to purchase coverage through HealthSource RI (see #3 below) to take advantage of the tax credit. Employers can only receive the credit for two consecutive taxable years.

3. You and your employees have more options for buying coverage.

In 2014, small businesses with up to 50 employees can purchase group coverage through HealthSource RI,  our state's health insurance marketplace (also called an exchange). HealthSource RI is the only place that employers will be able to access the tax credits beginning in 2014. (See #2 above.) With HealthSource RI, you have two ways to cover your employees:

  • You can select a plan to offer your employees, just like you do today.
  • You can offer your employees the option of selecting from all of the plans available. With this option, you will select how much you want to contribute towards your employees' premiums, and your employees can select the plan that best meets their health and financial needs.

If you don't qualify for tax credits or prefer to buy directly from Blue Cross, most of our plans offered through HealthSource RI will also be available—along with a few other options—through your broker or Blue Cross sales representative. Your broker can play a vital role in helping you evaluate your options as well as facilitate purchase directly from Blue Cross or through HealthSource RI.

4. Your health plan benefits will change.

To meet the 2014 requirements of the Affordable Care Act, plans offered to small employers must be changed. Please click on the chart below to see what you can expect from your plan.

small business chart
Read the definition of essential health benefitslifetime limitsannual limitsactuarial value, and out-of-pocket maximum.

5. The way premiums are calculated is changing.

When you receive premiums for your 2014 health plan, they will be based on your employees' ages and the ages of their dependents. Contract type (for example, an individual-only plan or a family plan), gender, and health status are not used to determine premiums. The family premium will be calculated by adding up the individual monthly premium amount for all family members. There is a cap of three dependent children under age 21, so families will never pay for more than three dependents under age 21.