Regardless of whether you are the sole-proprietor of a farm with no employees, have a few employees, hire seasonal farm workers, or are a large operation with a number of full and/or part-time employees, you need to understand your options under The Patient Protection and Affordable Care Act (ACA). Choosing which options provided for under the ACA is best for you and/or your family and employees will depend on a number of considerations you need to take into account.
For most agricultural producers and other small businesses, the best place to begin your search is to visit the Small Business Health Options Program (SHOP) Marketplace, Businesses with fewer than 50 full-time employees can also call the SHOP Marketplace at 1-800-706-7893 (TTY users: 1-800-706-7915). Health insurance coverage through SHOP starts as soon as January 1, 2014. Open enrollment began October 1, 2013. You can enroll and begin offering insurance any time during the year – although waiting beyond the March 31, 2014 open enrollment closing date may have implications and costs for you and/or your employees.
While small employers, those with less than 50 full time equivalent (FTEs) employees are currently not required to offer health coverage, there are a number of important options and provisions in the new law that farmers, farm families and farm employees will want to consider. Among these are:
- Sole proprietors are considered “individuals” and are subject to the ACA’s individual mandate. This mandate requires you to have health insurance or pay a penalty.
- Farmers and farm families who don’t currently have health insurance, can explore options and compare prices and services on healthcare.gov (the health insurance marketplace) or with private companies. Note, however, that premium tax credits will only be available for insurance that is purchased on healthcare.gov. Premium tax credits are subsidies, or assistance from federal funds that help pay for premiums. They are comparable to the subsidy farmers get when they purchase crop insurance. In short, farmers or consumers pay for part of their insurance premium and money from federal funds collected from taxes pay for the remaining part of their premiums.
- If you currently have an insurance policy, you can compare the costs of your current policy to policies available on healthcare.gov.
- For 2014, the SHOP Marketplace is open to employers with 50 or fewer full-time-equivalent employees (FTEs). Starting in 2014, businesses with 50 or fewer full-time equivalent (FTE) employees can use SHOP to offer coverage to their employees. As the employer, you control the coverage offered and how much you pay toward premium costs. With one online application, on your own or with the help of an agent, broker, or other assists, you can compare price, coverage, and quality of plans in a way that's easy to understand.
- Any farm operation with close to 50 full-time equivalent (FTE) employees should consult with their professional advisor after learning the basics about their options from healthcare.gov. Do the math and develop a plan with your professional advisor that optimizes the mandate requirements within your business model. A full-time employee is one who works on average 30 hours per week or 130 hours per month. Full-time equivalents are determined by dividing the total hours worked by part-time employees by 120.
- If you have fewer than 25 employees and provide health insurance to them through the SHOP Marketplace you may qualify for a 35% small business tax credit. In 2014, this credit will increase to 50% and you can still deduct from your taxes the rest of your premium costs not covered by the tax credit. To qualify for the Small Business Health Care Tax Credit, you must pay at least 50% of your full-time employees' premium costs. You don’t need to offer coverage to your part-time employees or to dependents.
- Choosing the coverage that’s right for your business. There are four categories of plans in the SHOP Marketplace: Bronze, Silver, Gold, and Platinum. They offer similar benefits, but differ based on how much enrollees share in the costs. In 2014, SHOP is open to employers with 50 or fewer full-time equivalent (FTE) employees. All plans offered through the SHOP must provide a set of essential health benefits. What your employees pay for deductibles and copayments – and the total amount they spend out-of-pocket for the year – depends on which plan category you choose.
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| The Kaiser Family Foundation has developed a video "Health Reform Hits Main Street." Checkout the video on Penn State Extension "Health Insurance and You" website. |
Penn State Extension’s website “Health Insurance and You” provides additional information about health care topics for individuals, families, and businesses. There is also a wealth of information for farmers and small business available on HealthCare.Gov and many other sites. In light of the fast-approaching deadlines for enrollment, it will be important for all farm operations (and other small businesses) to begin to prepare now. Consult with your current insurance provider or other professionals. Learn about the options and mandates that are part of the ACA and what they mean for your business. Finally, develop a plan that represents the best path forward for you and your operation.
