The United States Supreme Court recently upheld the constitutionality of the Affordable Care Act (reported in the July Insight). While the November elections could have an impact on whether the provisions of this law are actually implemented, here are some things your business should be doing or preparing for.

Effective this year, employers with 250 or more employees in 2011 must report the cost of health insurance coverage in box 12 of the employee’s W-2.

If you are a sole proprietor or own a business with no employees, the impact, starting in 2014, will be the same as on individuals. You must have health coverage by 2014 or pay a penalty. The top penalty for individuals, once fully phased in, is $695 or 2.5 percent of the amount of household income above the threshhold – whichever is greater.

Also starting in 2014, companies that employ an average of at least 50 full-time employees during the preceding calendar year will have to pay penalties if they don’t offer health care coverage for their full-time employees or offer minimum essential coverage that is unaffordable. Penalties amount to a maximum of $2,000 for each full-time employee in excess of 30 full-time employees who are certified to the employer as having purchased health insurance through a state exchange. There are no penalties if part-time employees are not offered coverage. In addition, these employers must file an information return that reports the terms and conditions of the health care coverage provided to the employer’s full-time employees. Information included is:

• Certification that the employer offers full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer sponsored plan.
  
• The number of full-time employees for each month during the calendar year.
  
• Name, address and social security number for each full-time employee employed during the calendar year and the number of months each was covered under the plan sponsored by the employer.

Also effective in 2014, employers with more than 200 full-time employees must automatically enroll full-time employees in health insurance coverage. The employee will then have the option to opt out.

And what about tax credits?

Since 2010, businesses with fewer than 25 full-time equivalent employees have been eligible for a tax break if they covered at least half the cost of health insurance.

The companies must have fewer than 10 full-time equivalent employees and average salaries of $25,000 or less. Currently, that full credit is 35 percent of the company’s contribution toward an employee’s insurance premium.

As the size of the business and average wage amount goes up, the tax credit goes down. The credit is completely phased out when a company hits 25 full-time equivalent employees or $50,000 in average salaries.

In 2014, the state-based Small Business Health Options Program Exchanges will be open to small businesses. Getting insurance through those exchanges could bump the maximum tax credit to 50 percent of a company’s contribution. However, the credit will be available for only two years after the exchanges are implemented.