In late June, the Department of Labor introduced final rules on Association Health Plans (AHP), which will allow bonafide associations to offer healthcare plans to member companies. While we had hoped for a different approach to regulating these plans, association health plans will be regulated by states as MEWAs.
According to the final rules, an association that wants to establish a healthcare plan must already exist for another purpose. In other words, an association cannot be formed for the exclusive purpose of offering healthcare plans to its members. Another stipulation is that new self-funded association health plans cannot be established until April 1, 2019.
Association Health Plans will be exempt from the federal mandate on essential health benefits, but will remain consistent with popular Obamacare rules such as coverage of pre-existing conditions and bans on lifetime limits.
While reserve requirements will vary from state to state, we expect that these plans will be quite costly to establish and closely monitored by state regulators. Nonetheless, for large associations with significant cash reserves, we expect this option to make it possible for thousands of small businesses to lower their cost of employee health benefits.
Results from Kaiser Family Foundation research show that while fewer small employers offered health benefits last year than 15 years earlier in 2000, and finding affordable coverage is a challenge, interest in small group plans is growing among companies with 3 to 50 employees.
One of the biggest concerns of small business owners continues to be the paid and unpaid leave bills passing out of committee. In the Senate, the Healthy Workplace Act S.B. 2147 would require all employers to provide up to 7 paid sick days each year. The House passed H.B. 3297, creating the Employee Paid Health Care Time Act, requiring any employer of one or more to provide paid healthcare time at a rate of one hour for every 22 hours worked for an employer of 50 or more and one hour for every 40 hours worked for employers with fewer than 50 employees.
The Federal Government isn’t the only governmental body pushing paid leave. Several states and even the City of Chicago are considering paid leave for a variety of hardships, from bereavement to bone marrow and organ donations. A 2015 survey by NFIB shows that the vast majority of small businesses already offer some type of paid leave, with many offering up to 2 weeks per year.
With tax season underway, now is a great time to check out the IRS Small Business and Self-Employed Tax Center, a convenient way for small employers to find answers to tax questions, educational materials, and other tools to help run their businesses.
Among the information and resources available on the website are:
- Small business forms and publications;
- Online applications for an employer identification number (EIN);
- Employment tax information–including federal income tax, Social Security and Medicare taxes,
- FUTA, and self-employment tax;
- Tax-related news that could affect small businesses;
- Small business educational events;
- IRS videos for small businesses; and
- The A-Z Index for Business.
Other resources available on the IRS website include a virtual small business tax workshop for learning about federal tax obligations, and a 12-month tax calendar for small business taxpayers with information on general business taxes, electronic filing and paying options, retirement plans, business publications and forms, and common tax filing dates.
Our section on Employer Tax Laws provides additional information on an employer’s tax responsibilities.
Health Care Reform Update
Moving Forward to Full Implementation
Small Businesses to Wait a Year
The Small Business Health Options Program, or SHOP, the part of the health care reform law intended to create a marketplace where small businesses (those with less than 100 employees) could choose from a variety of health plans, has been delayed until at least January of 2015. Continue reading