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Most Utah small businesses don’t like Obamacare, try to comply

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Which companies can participate?

For large businesses (50+ employees)

» You won’t be able to use Avenue H, at least not for now. It may be an option in the future.

» In 2015, you’ll face a penalty if 1) you don’t offer insurance; 2) you don’t pay at least 60 percent of an employee’s premium; 3) the plan you offer doesn’t meet the Affordable Care Act’s minimum standards; or 4) your insurance cost exceeds 9.5 percent of an employee’s household income.

» In 2015, you’ll need to provide information about full-time employee coverage and the cost of the benefits to the Internal Revenue Service.

Source: sba.gov, Avenue H

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Your small business qualifies for Avenue H if 1) it has two to 50 full-time employees; 2) half of them live in Utah; and 3) 75 percent of them want to participate in an Avenue H plan. 

But count your employees carefully, advises Jeremy Sewell with FirstWest Benefit Solutions. Full time is defined as 30 hours a week or 130 hours a month, and the rules change for companies with more than 50 employees. "Some [small business] employers may not know that they fall into a large employer scenario," Sewell said.

Do small-business owners choose a plan for their employees? Or do employees choose a plan for themselves?

Either way. Small-business owners who want to provide a plan for employees can apply on Avenue H or can still buy plans from private insurers outside the portal.

One main advantage to Avenue H is its "defined contribution" model, which means that the employer decides the amount of money they’re willing to spend on employees’ health care and then the workers do the shopping for a plan that meets their needs. 

Proponents say the defined-contribution system simplifies health plan decision-making for employers and also allows them to budget for health insurance more accurately.

If a small business chooses not to select a health plan for its employees, the workers are then free to shop on the individual marketplace at healthcare.gov.

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Small-business owners: What do you need to apply?

You’ll need to fill out an application at AvenueH.com.

You’ll also need to provide copies of a recent Quarterly Wage and Tax Form or your business license, payroll stubs and current health insurance plan information (if you have one). All of this needs to be submitted online. 

How much is this going to cost?

Rates will no longer be based on the health status or claims experience of your employees. Under the new law, carriers are allowed to consider only age, the type of coverage (individual versus family policy), tobacco use and where your small business is located. Utah has been divided into six sectors and the community rating of risk may vary based on geography.

Still, no one knows yet the precise costs, said Greg Matis, general counsel of SelectHealth. 

"The fact is it’s unknown," said Matis. "We do know that for specific businesses there will be movement in both directions — some will see their premiums increase and others will see them decrease."

What about a tax break to help payfor health care?

Starting in 2014, some small businesses can apply for a tax credit of up to 50 percent of what they pay for premiums for their employees. Only small businesses that offer a health plan on Avenue H will be eligible. The small-employer credit will be available for two consecutive taxable years and, according to healthcare.gov, the smaller the business, the bigger the tax break.

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