Frequently Asked Questions

If an employee’s share of the premium for employer-provided coverage would cost the employee more than 9.5 percent of that employee’s annual household modified adjusted gross income, then the coverage is considered “unaffordable” for that employee. If you offer multiple healthcare coverage options, the affordability test applies to the lowest-cost option available to the employee that also meets the minimum value requirement.

Because employers generally will not know their employee’s household incomes, employers can take advantage of one of the “affordability safe harbors” set forth in the federal regulations. Under the safe harbors, an employer can avoid a payment if the cost of the coverage to the employee would not exceed 9.5 percent of the wages the employer pays the employee that year, as reported in Box 1 of Form W-2, or if the coverage satisfies either of two other design-based affordability safe harbors.

On March 23, 2010, President Obama signed the Affordable Care Act (health care reform) into law. The law puts in place a significant number of health insurance reforms; many rolled out between 2011 and 2013 while some of the final, and most significant, changes of the law took effect on January 1, 2014.  There are still changes taking place in the current year.

It is likely that some of these new laws and regulations will affect your business in some way. This guide is intended to help you navigate these challenges and opportunities so that you can make the best decisions for your business as the health insurance landscape continues to change in 2017 and beyond.

There is no provision for a monetary payment to the employee to avoid the assessment. According to Section 4980H of the Internal Revenue Code, an employer with 50 or more employees could be subject to assessment if any full-time employee is certified to receive an advance premium tax credit or cost-sharing reduction. Generally this may occur where either: (1) the employer does not offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan; or (2) the employer offers its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an employer-sponsored plan that is either unaffordable relative to the employee’s household income or does not provide minimum value.

Health Care Reform will affect Small Employers and Large Employers differently. Therefore it is important to know how your business will be classified when considering how you will be impacted.

An employer with anywhere from one to 50 full-time and full-time equivalent employees is considered a Small Employer.

An employer with 51 or more full-time and full-time equivalent employees is defined as a Large Employer.

A sole proprietor with no employees must purchase insurance as an individual.

How health insurers rate individuals and small businesses: They are only able to use age, composition of family, geographic area and tobacco as rating factors. Nevada has also expanded its review of health insurance rates. Nevada now reviews all health insurance rate changes in the individual and small group insurance markets.

The law also requires insurance companies to spend the majority of your premium dollars on health care. This means that insurers selling policies to individuals or small groups must spend at least 80 percent of premiums on direct medical care and efforts to improve the quality of care or provide a premium rebate to their customers.

If you’re self-employed with no employees, you’re not considered an employer. You can use the individual Marketplace to find coverage that fits your needs.

How to know if you’re “self-employed”

If you run an income-generating business with no employees, then you’re considered self-employed (not an employer) and can get coverage through the Marketplace. You’re not considered an employer even if you hire independent contractors to do some work.

If you have employees (generally, workers whose income you report on a W-2 at the end of the year) you’re considered an employer. Then you could get coverage for yourself and your employees through the SHOP Marketplace. Learn more about how to determine if you have employees.

If you’re self-employed, you’ll have health coverage options in 2018.

Starting November 1, 2017, you can use the Marketplace to find health coverage that fits your budget and meets your needs. You can compare important features of several plans side-by-side, all of them offering a full package of essential health benefits. You can see what your premium, deductibles, and out-of-pocket costs will be before you decide to enroll.

You can’t be denied coverage or charged more because you have a pre-existing health condition.

If you currently have individual insurance–a plan you bought yourself, not the kind you get through an employer–you may be able to change to a Marketplace plan. Learn more about changing individual insurance plans.

For the sake of your employee count, your full-time employees and the number of full-time equivalent employees is used. This includes:

• Employees who work an average of 30 hours or more a week.
• Employees who worked 130 hours or more per month.
• The number of hours worked by all part-time employees divided by 120 (rounded down to the nearest whole number). This is your full-time equivalent employee count.
• Seasonal employees are included in your count, for more information please see the “Questions for Large Employers” section.

To calculate your annual average, add the monthly totals of full-time and full-time equivalent employees from the last calendar year, and divide the total by 12. Round down to the nearest whole number.

It is important to note that this calculation takes into account all employees employed by the same person, entity, or group. For example, one individual owning two unrelated businesses, each with 40 full-time employees and equivalents, may be considered a large employer with 80 employees. If you have questions specific to your situation or use an employee leasing or temp company, please consult an attorney.

If you have 50 or fewer full-time equivalent (FTE) employees, you’re considered a small business under the health care law.

As a small business, you may get employee insurance through the SHOP Marketplace. This applies to non-profit organizations too.

If you have fewer than 25 employees, you may qualify for the Small Business Tax Credit. Non-profit organizations can get a smaller tax credit.

The Small Business Health Options Programs (SHOP) are open to employers with 100 or fewer FTEs.

If you’re self-employed and have no employees, you can buy insurance through the individual Health Insurance Marketplace. You would not use the SHOP.

If you have more than 50 employees

Many important parts of the health care law apply to businesses with more than 50 FTEs. Under the health care law, these are considered “large businesses.”

Find out how the health care law could affect you if you’re considered a large business.

In order to qualify as minimum essential coverage, a plan must be an employer-sponsored plan defined as, with respect to an employee, a group health plan (including both fully insured and self-insured plans) or group health plan insurance coverage offered by an employer to an employee that is (1) any plan or coverage offered in the small or large group market within Nevada; or (2) a health plan treated as being grandfathered under the Affordable Care Act that is offered in the group market.

Minimum value is defined by the U.S. Department of Health and Human Services as coverage of at least 60 percent of the total allowed cost of benefits provided under the plan—it is a measure of benefits, not a measure of premium.

A minimum value calculator will be made available to employers by the IRS and Department of Health and Human Services. Employers can input certain information about the plan, such as deductibles and copay, into the calculator and get a determination as to whether the plan provides minimum value. If the plan covers at least 60 percent of the estimated total allowed cost, the plan will meet the “minimum value” test.

The Marketplace is a new way to find quality health coverage. It can help if you don’t have coverage now or if you have it but want to look at other options.

With one Marketplace application, you can learn if you can get lower costs based on your income, compare your coverage options side-by-side, and enroll.

Learn more about Nevada Health Link Here.

The law does not require you to provide health insurance. However, if you employ 50 or more full-time employees or full-time equivalent employees, and you do not provide affordable minimum essential coverage for your full-time employees (and their dependents), you will be required to pay an assessment to the Internal Revenue Service (IRS).

The law specifically exempts all businesses that have fewer than 50 full-time employees or full-time equivalent employees from this assessment.

For employers who have 50 or more full-time or full-time equivalent employees and who do not offer affordable minimum essential coverage, the assessment will be calculated in one of these ways:

1. If you do not provide insurance at all or offers coverage to less than 95% of your full-time employees (and dependents), and if at least one full-time employee receives an advance premium tax credit, the assessment for calendar year 2017 is $2,260 for each full-time employee you employ after the first 30 employees.
2. If you do provide insurance to at least 95% of your full-time employees (and dependents), but have at least one full-time employee who receives an advance premium tax credit, the assessment for calendar year 2017 is a monthly charge calculated at: the number of full-time employees receiving a premium tax credit for that month multiplied by 1/12 of $3,390.
   The amount of the payment for any calendar month is capped at the number of full-time employees (up to 30 per month) multiplied by 1/12 of 2000. Part time and certain full time employees are not counted for this calculation.

To be subject to the assessment, you must employ at least 50 full-time employees or a combination of full-time and part-time employees that equals at least 50.

For example, 40 full-time employees employed at least 30 hours per week on average plus 20 half-time employees working 15 hours per week on average would be the equivalent of 50 full-time employees. As an employer, you must determine each year, based on your current number of employees, whether or not you will be required to pay an assessment.

For example, if you have at least 50 full-time employees (including full-time equivalents) in the prior calendar year, then you will be required to pay an assessment.

If you have seasonal employees, then you must average the number of employees across the months in the year to see whether you have 50 or more employees. The averaging can take into account fluctuations throughout the year. If you are close to the 50 full-time employees (including equivalents) and want to know what to do, a special transition relief program as been proposed. The regulations issued by the IRS provide additional information about determining the average number of employees for a year and information about how to take account of salaried employees who may not clock their hours and additional information on seasonal workers. Additional information is available at: http://www.healthcare.gov

Employers will not have to pay an assessment if two conditions are met: The employer averages 50 or more full-time employees (including equivalents) for 120 days or less, and the employees who bring the employer over the 50-employee threshold are seasonal workers. If these two conditions are met, the employer is not subject to the assessments that would apply for failing to provide coverage to full-time employees.