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Affordable Care Act Update For Small Businesses

Friday, February 21, 2014

by Kelly Weaver, Small Business Development Center Regional Director


As implementation of the Affordable Care Act kicks into high gear, here’s a few items that small business owners should keep in mind.


  • If you are a sole proprietor with no employees, you can apply for coverage through the Health Insurance Marketplace as an individual. 
  • At this point, no business is required to provide health insurance.  
  • If you insure your employees now, you can keep the coverage you have.
  • Businesses with less than 50 full time equivalent employees can apply for coverage for your employees through the Small Business Health Options Plan (SHOP). 


By using the SHOP, you control the coverage you offer and how much you pay toward employee premiums.   You may also qualify for a small business health care tax credit worth up to 50% of your premium costs.   The tax credit applies to businesses who are purchasing health coverage for their employees through the SHOP and paying a minimum share of the premium costs.  Qualifying businesses will have fewer than 25 full-time equivalent employees making an average of about $50,000 a year or less. You can still deduct from your taxes the rest of your premium costs not covered by the tax credit.


For both the individual and small business, the plans are organized into 4 categories:  Bronze, Silver, Gold and Platinum.  All plans in the Marketplace will cover the same Essential Health Benefits.  The difference in the plans is not so much what services are covered but how much you will pay out-of-pocket for those services.  All plans will have a monthly premium along with copayment, coinsurance and deductible amounts.


Note that if you already offer health insurance for your employees outside of the Health Insurance Marketplace, you may be seeing some changes in the services covered under your current plan so that they too cover the same Essential Health Benefits. 


Lastly, there are a few deadlines to be aware of.  Enrollment began in October and will close March 31, 2014.  Those enrolled by December 15th will have coverage beginning January 1st.   If you have not sent notices by October 1 to your employees about their healthcare options, it is not too late to do so. (Model notices are available from the US Department of Labor.) 


Visit to enroll or learn more.  You can also contact Carla Burns, a certified navigator who can provide free counseling for those seeking insurance.  Reach Carla at (605) 626-2565 or

Kelly Weaver is the Regional Director of the Small Business Development Center in Aberdeen which offers free, confidential business consulting to start up and existing businesses.  She can be reached at (605) 626-2565 or  The Center is hosted by GROW South Dakota (also known as Northeast South Dakota Community Action Program). 

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