7 Key Terms in the Affordable Care Act that you should know

The Affordable Care Act includes new health care reform terms used to describe parts of the law that affect small business. Understanding what these terms mean can help both self-employed individuals and small employers better navigate the law and take advantage of reforms that are helping to lower premium costs and increase access to quality, affordable health insurance.

Here are seven terms in the Affordable Care Act that small businesses should know.

1. Affordable Insurance Exchange

Also known as the health insurance “Marketplace,” the Affordable Insurance Exchange is a new transparent, competitive insurance marketplace where individuals and small businesses can purchase affordable and qualified health benefit plans. The Marketplace for small employers, known as the Small Business Health Options Program (SHOP), and the Individual Marketplace for consumers and those who are self-employed, will open in all states on January 1, 2014. Enrollment begins on October 1, 2013. To get the latest updates on enrollment, sign up for email and text alerts today.

2. Employer Shared Responsibility

Although employers are not required to provide health coverage to their employees under the Affordable Care Act, employers of a certain size will be subject to the Employer Shared Responsibility provision of the law. Under this provision, beginning in 2014, business owners with at least 50 full-time or full-time equivalent (FTE) employees that do not offer health coverage to their full-time employees may be subject to a shared responsibility payment under the health care law. A full-time employee is generally one who is employed an average of 30 or more hours per week. Businesses with fewer than 50 full-time or FTE employees are generally not affected by these provisions. To assist you, the IRS has developed a helpful set of Q&As.

3. Essential Health Benefits

The Affordable Care Act ensures that health plans offered in the individual and small group markets, both inside and outside of the health insurance Marketplace, offer a comprehensive package of items and services, known as essential health benefits. Essential health benefits must include services within at least ten core categories, among them emergency services; maternity and newborn care; prescription drugs; and preventive and wellness services. For more information on these requirements, visit healthcare.gov.

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