What Small Businesses Need to Know
A small business is defined as a company that has up to 50 full-time employees.
Current HMSA groups
We’ve got great news for you. Because of decisions made by President Barack Obama and the state insurance commissioner, HMSA is offering you and your employees the same health plan you currently have for another year.
What does this mean for you? Several things:
- If you’re adversely affected by age rating, you can now choose to stay with HMSA and avoid age rating of your employees and their dependents for another year.
- If you renew your policy with HMSA next year before October 1, 2014, you can keep your current plan for another 12 months through 2015. For example, groups that renew on July 1, 2014, can extend their plan through June 30, 2015.
- Please keep in mind that if you extend your current plan, your rate will be adjusted only to cover government fees and taxes and the expected rise in medical costs.
Options to buy coverage
Starting October 1, 2013, small businesses with up to 50 full-time employees will have two options to buy employee health plans. They can work directly with HMSA or use the Hawai‘i Health Connector, an online state health marketplace.
Tax credits available
Businesses that use the Hawai‘i Health Connector may qualify for a tax credit of up to 50 percent if they have an equivalent of up to 25 full-time employees with average wages of less than $50,000. There’s a lot of paperwork to fill out, so check with your tax adviser.
Premiums are changing
Starting in 2014, health plan premiums for Affordable Care Act plans will be based on your employees’ age. Health plans for older employees may cost more than plans for younger employees.
Also, the federal government will pay for health care reform changes with new fees and taxes imposed on health insurers nationwide, including HMSA. This will add costs to health plan premiums.
Will my costs go up?
Benefits are changing
Starting in 2014, Affordable Care Act Plans will include:
- Prescription drugs
- Ambulance service
- Emergency care
- Laboratory services
- Maternity and newborn care
- Mental health and substance use services
- Pediatric oral and vision services
- Rehabilitation and habilitative services
- Services for preventive care, wellness, and chronic disease management
Your part-time employees will need coverage
You’re not required to offer health care coverage to your part-time employees who work less than 20 hours a week. However, they’ll need coverage by March 31, 2014, or will have to pay a fine to the Internal Revenue Service. Those employees can buy an HMSA individual health plan directly from us or in the Hawai‘i Health Connector, the state’s online health insurance marketplace. Depending on their income, they could be eligible for financial help to pay for health insurance if they buy it in the Connector.
To-do checklist for employers
Health care reform requires you to:
- Report the value of your employees’ benefits on their annual W-2 form beginning with the 2012 forms. Some employers are exempt from this requirement for now, including employers who file less than 250 W-2s, multiemployer plans, health retirement account plans, and self-insured plans not subject to COBRA rules.
- Starting in 2014, report your employees’ minimum essential coverage annually to the Internal Revenue Service. Large employers with at least 50 full-time equivalent employees must file additional information about fulfilling their responsibilities.
Do you offer your employees a B status plan under Hawaii’s Prepaid Health Care Act? If you do, state law requires you to provide coverage to your employees’ dependents and pay at least half of that coverage. If you don't offer a B status plan, you’re not required to offer dependent coverage.
They can still get coverage by contacting us. We’ll help them choose a plan. They can also buy an HMSA plan in the Hawai‘i Health Connector, the state’s online health insurance marketplace. Depending on their income, they could be eligible for financial help to pay for health insurance if they buy it in the Connector.
If you offer your employees family coverage, their dependents up to age 26 could get coverage under the family plan.
Remind your employees that health care reform requires almost everyone to get coverage by March 31, 2014, or pay a fine to the Internal Revenue Service. And no one will be turned down for coverage even if they have a serious health condition. So it’s important that everyone has coverage.
This information is based on HMSA’s review of the Affordable Care Act (ACA). This overview is intended for educational purposes only and should not be used as tax, legal, or compliance advice.