Affordable Care Act questions and answers from Highmark Delaware


(This column was compiled by High Mark Blue Cross Blue Shield Delaware)

With the Affordable Care Act weighing in at more than 900 pages, it’s no surprise that there is still confusion surrounding the employer responsibility requirements. The requirement has been delayed until 2015, giving business owners more time to understand how and what provisions will affect them.

Here are answers to some of the questions we here at Highmark Blue Cross Blue Shield Delaware are hearing from the businesspeople in our community. Keep in mind, this information is current as of September, 2013. As the requirements and provisions continue to evolve, this information could change.

As a business owner, am I now required by law to provide health insurance coverage for my employees?

No. The Affordable Care Act does not require businesses to provide health care to their employees. But, as it stands now, starting on Jan. 1, 2015, employers with 50 or more full-time equivalent employees may face penalties if they don’t.

What is a full time equivalent employee, and how do I figure out how many I have?

Take the total number of hours your part-time employees work in a normal month, and divide that by 120. If you have 6 part-time employees, and they each work 20 hours a week, that’s 480 hours a month. Take the 480 hours, divide by 120 and by this math, you have 4 full time equivalent employees.

Add that number to the total of full time employees you have, and you have your total number employees that are considered to be full time and full time equivalent (FTE). This is the number that determines if you are a small business, or a larger business.

Companies with 50 or more full time/full time equivalent employees may be subject to penalties if they do not offer affordable health coverage to their employees.

I have a seasonal business, and only have part-time employees for a small portion of the year. How does that affect my employee count for the Affordable Care Act?

An exemption for seasonal employees is built into the Affordable Care Act. If a business only has more than 50 employees for fewer than 120 days per year, they may not be penalized if they don’t offer health insurance because those extra employees (and FTEs) are considered seasonal employees. Seasonal employees don’t count towards the total number of employees, as long as they work fewer than 120 days per year.

I own a small business, and have fewer than 25 employees. Am I subject to penalties if I don’t offer health insurance to my employees?

No. But there are provisions in the Affordable Care Act that are designed to encourage small business owners to provide health insurance coverage to their employees by offering tax credits. The credits are determined on a sliding scale, so the smaller the business is, the higher the tax credit will be. Starting in 2014, the tax credits will only be available to small businesses that purchase coverage through the Small Business Health Options Program (SHOP) marketplace.

I have 40 employees. That puts me in a spot where I am not considered to be a large employer with 50 or more employees. Am I still considered a small enough business to get the tax credits?

No. The tax credits are only available to businesses with 25 or fewer employees. But, since you haven’t reached the 50 employee threshold to quality as a larger employer, you also won’t be assessed any penalties if you don’t offer health insurance coverage. If you do decide you want to offer health coverage for your staff, you can always purchase a health plan directly through a private insurer like Highmark Blue Cross Blue Shield Delaware. Or, you will be able to compare and purchase coverage though the SHOP marketplace.

I am a large employer, with more than 50 full time and full time equivalent employees. What happens to me?

The good news is that most large employers already offer health coverage to their employees. According to an annual survey by the nonprofit Kaiser Family Foundation, 98 percent of employers with more than 200 employees already offer health benefits, as well as 94 percent of companies with between 50 and 199 employees.

Those few employers that do not provide coverage for their employees will be assessed a penalty if any one of their employees purchases their own coverage on a health insurance exchange and receives a tax credit.

I offer insurance for my employees, but it’s expensive and not many of my employees take part in the coverage. Does this mean I’m doing everything I have to do and won’t be penalized?

Not necessarily. If you offer coverage that does not meet the new “minimum essential coverage” standards or is considered unaffordable, you may have to pay a penalty.

I want more information. Where should I go?

For all of your questions surrounding the Affordable Care Act and health care reform, go to More information is also available at

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