Health Reform & Small Business Impacts in 2015

A recent survey found 61% of small business respondents said they were still confused about Obamacare.

Sibyl Bogardus, Chief Compliance Officer for Hub International offers some clarifications about this still evolving law.

Bogardus points out the good news is that small employers with 99 or fewer full-time employees do not have to comply with health reform in 2015. 

However, some conditions will apply to employers with 50-99 full-time employees, including a certification, but the delay is welcome relief.

An employer with more than 50 full-time employees (but under 99) has a number of tasks to accomplish between now and 2016. 


  • The employer in that size range must count their employees in 2014 to certify the one-year delay eligibility does indeed apply, and compliance in 2015 is not required.  Hub International consultants provide a worksheet for that purpose; all supporting back-up showing which numbers were used and why will be important if an agency requests the proof.  Size is generally based on the full-time employee average on business days in 2014 for delay until 2016.  (But see below for a special 6-month rule.) 
  • The employee count also needs to include full-time equivalents – the number of bodies it would have taken to do the work of your part-timers.  The calculation requires the employer to add all hours worked by part-time people in a month and divide by 120.  A worksheet approach is also recommended for this calculation, along with the back-up documentation showing how the numbers were determined in the event of an audit. 
  • An employer does not have to average over the entire year; they can instead select a consecutive 6 month period in 2014 to determine size.  Of course, an employer should use the most favorable 6 months. 

The employer will certify to all of this in early 2016 using a new IRS form (draft but no final versions have been released as of November 2014).  Additionally, an employer will need to be sure not to cut headcount or hours except for bona fide business reasons like reorganizations, sale of a business, bad economy, or poor performance.  So, document any terminations of employees and the qualifying reasons. 

So what if you are under 99 full-time employees but you currently already offer coverage to be competitive – to attract and retain your employees?  Offering a plan is more complicated than ever, and dealing with new premium rates can be a challenge, but your employees will be grateful for your efforts. 

The exchanges had a rocky start last year, and even for people who elected coverage, the networks of providers seemed to shift in size – and not in a good way.  Providers shown in directories were no longer participating or the providers often did not agree to be a certain network and numbers of available physicians have shrunk during 2014.

 Any current health plan cannot be eliminate or reduced below minimum value (a bronze level plan).  The employer also cannot change eligibility and must keep share of the premiums at 95% of current level or keep their share of the total premium the same.

Sibyl Bogardus, Chief Compliance Officer for Hub International, is part of Hub’s Employee Benefits Practice.