THE BLOG
11/12/2014 04:04 pm ET Updated Jan 11, 2015

4 Things Obamacare Has Actually Changed For Small Business

For better or worse, the Affordable Care Act (also known as Obamacare) made a big splash in 2010 when it was signed into law. Since then, its features have slowly come into effect. Some have appeared as expected, but others have been delayed or changed from how they were originally written. To clear the air, here's four ways Obamacare has actually changed the law since 2010.

1. Health insurance is required.

Starting in 2014, you could be charged a penalty for not having health insurance that meets minimum requirements. In 2015, the fee will be 2% of your income or $325, whichever is higher.

The minimum requirements were set by the Affordable Care Act and includes things like the 10 essential health benefits and a minimum value of coverage. All Obamacare plans meet the requirements and most plans on the private marketplace do as well. However, some types of health insurance plans do not. If you have a short-term plan, for example, you'll probably still be charged the penalty for not having health insurance.

2. Medium and Large Businesses must provide insurance.

Starting in 2015, businesses with at least 100 full time equivalent workers must provide coverage to 70% of their employees. This is called the employer mandate. If they do not comply, businesses could face a penalty of $2,000 per employee. The penalty does not include the first 30 employees counted, so a business with 100 employees would have to pay $140,000 ($2,000 x 70).

In 2016, the employer mandate is set to include businesses with 50 to 99 full time equivalent workers as well. Also, the percentage of employees who must be covered is set to increase from 70% to 95%.

As of now, small businesses (those with fewer than 50 full time equivalent employees) are not required to provide health insurance, nor will they be required at any point under the Affordable Care Act. Calculating the number of full time employees can be tricky. For example, a company that only has 20 employees working full time and 60 part-time workers might be considered to have 50 full-time employees under the law. Read this for more details.

3. No more pre-existing conditions.

As of January 1, 2014 insurance companies can no longer turn people down or charge them higher rates because of a disease or chronic condition. Health insurance rates can only be determined based on age and whether or not you use tobacco. Rates will also vary depending on where you live, the level of coverage offered by the plan and whether or not you're covering family members.

4. Subsidies available to low and middle-income earners.

If you earn below 400% of the poverty level (which is $46,680 in 2014, or $95,400 for a family of four) you can apply for a reduction to your premium: the monthly fee you pay for health insurance. Using this subsidy calculation tool, we found that family of four that earns $60,000 can save almost 50%. Note, however, this can only be applied towards Obamacare-approved individual health insurance plans. You can't use it towards health insurance you get from your employer.