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3 Things Title Companies Should Know About the Affordable Care Act

December 31, 2013

There are three main provisions of the Affordable Care Act that ALTA member companies should know about. According to the Small Business Administration (SBA), the Affordable Care Act will help small businesses by lowering premium cost growth and increasing access to quality, affordable health insurance. Depending on whether you’re a small or large employer, different provisions of the Affordable Care Act may apply to you.

Businesses with Fewer than 25 Employees- Small Business Tax Credits

The Affordable Care Act does not require that businesses provide health insurance, but it offers tax credits for eligible small businesses that choose to provide insurance to their employees. To qualify for a small business tax credit of up to 35% (up to 25% for non-profits), you must have:

  • Fewer than 25 full-time equivalent employees
  • Pay average annual wages below $50,000
  • Contribute 50 percent or more toward employee health insurance premiums
Beginning in 2014, this tax credit goes up to 50 percent (35 percent for non-profits) and is available to qualified small businesses who participate in the Small Business Health Options Program (SHOP) Exchanges.

Businesses with 50 or Fewer Employees- Affordable Insurance Marketplaces

The Affordable Care Act does not require that businesses provide health insurance, but beginning in 2014, small businesses with generally 50 or fewer employees will be able to purchase coverage through SHOP , competitive marketplaces where small employers can go to find health coverage from a selection of providers. The SHOP Marketplaces and Individual Marketplaces for those who are self-employed open on Jan. 1, 2014. Open enrollment begins on Oct. 1, 2013. SHOP will offer small businesses increased purchasing power similar to that of large businesses.

Businesses with 50 or More Employees- Employer Shared Responsibility Provisions

Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals share the responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Employers are not required to provide coverage to their employees under the Affordable Care Act. However, beginning in 2014, businesses with 50 or more full-time employees (or full-time equivalents) that do not offer affordable health insurance that provides a minimum level of coverage to substantially all of their full-time employees (and their dependents) may be subject to an employer shared responsibility payment if at least one of their full-time employees receives a premium tax credit to purchase coverage in an insurance Marketplace. A full-time employee is generally one who is employed an average of 30 or more hours per week.

If you meet or are close to this threshold level of full-time employees, it’s important to understand how these rules may apply to you and how the employer shared responsibility payments could be triggered. For more guidance on the employer shared responsibility payments, refer to the IRS’ FAQ document at IRS’ FAQ document,



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