Michiganders newly enrolling or changing their health insurance offered through the Affordable Care Act have more options to choose from this time around, with an expansion of carriers in the state’s federally-run marketplace. Image courtesy of www.healthcare.gov.

Mona Shand, Michigan News Connection

When it comes to open enrollment for health-insurance plans through the Affordable Care Act, experts say in many ways, the second time is the charm.

With the kinks worked out of the federal HealthCare.gov website and more options to choose from, the second open-enrollment period is off to a smooth start, said Philip Bergquist, director of health-center operations for the Michigan Primary Care Association. This time around, he said, more Michigan residents are able to use technology to their advantage.

“We’re seeing more mobile use of HealthCare.gov, folks with tablets at events, doing it in local businesses,” he said. “Really wherever the need is.”

From new enrollees looking for first-time coverage to those shopping the new additions to the marketplace, Bergquist said he sees signs that the conversation around health insurance in Michigan is improving.

“More detailed questions, more in-depth conversations,” he said, “and that’s really exciting because it’s showing that the base of enrollees in the marketplace is really learning a lot about the coverage that they’ve selected and how to use it.”

However, federal data suggest about a quarter-million Michigan residents who are eligible for coverage under the Affordable Care Act have yet to get it. Right now, 17 different carriers—four more than last year and the highest number of any state with a federally run marketplace—are offering policies.

The open-enrollment period runs through Feb. 15, but anyone looking for coverage to begin in January must purchase a plan by Dec. 15. Enrollment-assistance information is available online at EnrollMichigan.com.

By Judy Reed

While individuals have been confused about the new requirement for health insurance and what they need to do, many business owners are also struggling with what it means for them.

Gabrielle Warner, of Innovative Solutions Agency, Inc., gave the Post some insight on basic things that business owners need to know. Warner is a Chartered Benefits Consultant, and Marketplace and SHOP registered agent.

Things to know:

Timeline

The mandate for businesses to offer insurance to employees has been pushed to January 1, 2015.

What is considered a full-time employee?

The definition of a full-time employee changed under the Affordable Care Act. It used to be someone who worked 40 hours. That has been reduced to 30 hours.

Small groups of 2-25 employees

Small businesses with 2-25 employees do not have to offer coverage. However, if they do, they may be eligible for a tax credit. (It is based on the income of the employees.) However, if a small business wants to offer insurance in 2014, and try to get the tax credit, the plan must be SHOP eligible, even if they have already been offering insurance and getting the tax credit. (SHOP is the Small health options program.) The tax credit is in addition to the tax deduction business owners can claim. An agent will help owners choose a plan, and then help enroll the employees. A small group can enroll anytime during the year.

Businesses could also offer employees a self-funding arrangement, or use a defined contribution arrangement.

Small groups of 26-49 employees

Any business with 2-49 employees does not have to offer coverage. But groups with more than 25 employees are not eligible for the tax credit.

Instead of offering insurance, the businesses could offer assistance to employees on how to purchase individual polices, either on or off the healthcare exchange. An agent could go in and help educate the employees on the process.

Businesses with 50-plus employees

Businesses with 50 or more employees must offer coverage that meets Essential Health Benefits and Affordability standards or pay a penalty. The fine for 2015 is $2,000 per FTE (full time equivalent) beyond the first 30 FTE. In a full time equivalent, you don’t just count full time people. You must count part time hours as well. Two part time people might count as one FTE. (An agent can help with the formula.)  So a business with 55 FTE would deduct the first 30, leaving a penalty to be paid on 25 FTE at $2,000 each, or $50,000 per year. It would be divided up monthly.  The penalty will not stay $2,000 per FTE, however. In future years it will be adjusted upward. Some businesses may choose to do this rather than purchase insurance. “Even if the employer doesn’t provide coverage, the penalty is their way of pitching in. Their penalty goes into a pool to help pay for subsidies, although not directly to their employees,” explained Warner.

Rate structure change

Most people are used to seeing a rate or individuals, couples, and families. That is no longer the case. Rates will now be set according to each individual in your family. That means some plans will increase in cost, while others will drop.  Plans in both the individual and small group markets (both on and off the exchange) will be guaranteed—you will always qualify and can always renew. And the base rates will be the same. However, premiums may vary according to age, whether you use tobacco, and your geographic rating area. Rates can no longer be dictated by gender.

Waiting period

There will be no more than a 90-day waiting period before benefits begin for a new employee.

Cadillac plans

In 2018, a “Cadillac” tax goes into effect—a 40 percent tax on the value of benefits over $10,200 for single person plans and $27,500 for family plans. It includes the value of all employer-sponsored coverage.

If you’re self-employed and paying for medical, dental or long-term care insurance, the IRS wants to remind you about a special tax deduction for some insurance premiums paid for you, your spouse, and your dependents.

Starting in tax year 2011, this deduction is no longer allowed on Schedule SE (Form 1040), but you can still take it on Form 1040, line 29.

You must be one of the following to qualify:

A self-employed individual with a net profit reported on Schedule C (Form 1040), Profit or Loss From Business, Schedule C-EZ (Form 1040), Net Profit From Business, or Schedule F (Form 1040), Profit or Loss From Farming.

A partner with net earnings from self-employment reported on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., box 14, code A.

A shareholder owning more than 2 percent of the outstanding stock of an S corporation with wages from the corporation reported on Form W-2, Wage and Tax Statement.

The insurance plan must be established under your business.

For self-employed individuals filing a Schedule C, C-EZ, or F, the policy can be either in the name of the business or in the name of the individual.

For partners, the policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.

For more-than-2-percent shareholders, the policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.

For more information see IRS Publication 535, Business Expenses, available on this website or by calling 800-TAX-FORM (800-829-3676).