What Health Reform Means for You

Understanding the Affordable Care Act

Not all self-employed persons and small businesses are affected by the Affordable Care Act (also known as the ACA or “Obamacare”) in the same way. The law draws a sharp division between businesses with the equivalent of 50 or more full-time employees and those with fewer than 50 employees.

Businesses that employ the equivalent of 50 or more full-time workers are required to provide group health insurance coverage to their employees or face financial penalties. Small businesses with fewer than the equivalent of 50 full-time workers are generally not required to provide group health insurance coverage, though tax incentives may be available to some who do.

Individuals who do not receive group health insurance coverage through an employer-based plan are generally required to purchase coverage on their own or face possible tax penalties.

This table provides basic guidance but some exceptions may apply. For example, some people without employer-based coverage are not required to buy coverage on their own, depending on their income or the cost of coverage in their area.