More than three years in the making, the exchanges are meant to help drive down the cost of health care for individual consumers, families and small business owners across the country. However, the latest polls suggest that many still have no idea what the health care overhaul means for them or how the exchanges will work.
Here is what small business owners need to know:
What exactly are the small business exchanges?
Think of them like Priceline or Expedia, but for health insurance, rather than travel bookings. In every state, there are two separate portals — one for individuals shopping for themselves and another for small business owners shopping for their companies.
On their respective sites, individuals and employers can compare rates offered by various private insurance companies, apply for federal tax credits, choose a plan and pay their premiums, all online.
Here, you can walk through one of the exchanges step-by-step.
Who operates the exchanges?
It depends where you call home (or, more accurately, where your business calls home). Sixteen states and the District of Columbia elected to build their own exchanges, one for individuals and one for small business owners, while the remaining states opted to use marketplaces built and operated by the federal government.
Where do I find my state’s exchange?
Head to Healthcare.gov and enter your information; the site will direct you to your state’s exchange.
Which companies can buy plans on the exchanges?
During at least the first year, the exchanges in every state are available to companies with no more than 50 full-time employees or equivalents. By 2016, every exchange must raise the cap to 100 workers.
Note that there are a number of different small business size limits for different provisions of the health law. Check out some of the most important ones here.
What are full-time equivalents?
In determining size status for various provisions of the health care law, employers are required to tally all hours worked by part-time employees using a specific (and somewhat complicated) formula to determine their number of full-time equivalents, which is then added to their number of full-time workers to get the total number of employees.
Here is a primer on how to perform those calculations.
Do I have to sign up for coverage?
No. The exchanges are only for firms with fewer than 50 workers, which are all exempt from what is known as the employer mandate portion of the law, which requires companies to provide a minimum level of coverage to employees.
Meanwhile, those firms with more than 50 workers (which are therefore subject to the mandate) will not be penalized for not providing health plans during the first year.